Law of Equity and Trust Notes

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Meaning And Historical Evolution Of Equity
The Meaning Of Equity
In normal parlance, equity means justice and fairness. In the legal world, equity means this and much
more. All legal systems all over the world, over the ages, have always had a concept of equity embedded
in their administration of justice. The Civil Law jurisdictions of Europe inherited the Roman Legal
system. In Roman law and most other legal systems, there was a fusion of law and equity. However, this
was not the case in England.
Equity in England evolved separately from the law and became rules that were used to mitigate the
harshness of the common law. These specific rules of equity are referred to as technical equity. In order
to fully understand the concept of equity, its evolution over the years to its present state would be very
important. The study of the evolution of equity in England is very important for the Nigerian situation
since Nigeria makes use of the common law of England.

Historical Evolution Of Equity

Like most other legal systems, equity was initially fused into the law of England. This equity was in the
general sense and not the technical equity as we understand it to mean today. The late Anglo-Saxon and
early Norman Kings were the fountains of justice. Whenever the law courts provided inadequate
remedies for a case, the parties petitioned to the king who resolved them according to the dictates of
justice. The Lord Chancellor was the Secretary of State and as such, it fell on him to write down and
issue the King‘s royal writs[1].
Over the years, the Lord Chancellor invented writs according to the prevailing circumstances. The
Parliament saw this as a usurpation of their role and limited this in the Provisions of Oxford. This stalled
the development of equity till the in consimili casu clause in the Statute of Westminster in 1258. This
clause allowed the Lord Chancellor to issue writs when there was a similar case which had a writ but the
present case didn‘t have a writ.
As the petitions to the King became burdensome, he delegated the task of dealing with these petitions to
the Lord Chancellor. The Lord Chancellor was usually a clergyman and as a result, his court ruled
according to the dictates of his conscience. As a result, the holdings of the court of chancery/equity were
according to the Lord Chancellor‘s personal opinion. This prompted John Selden to state that the
judgement of the Court of Chancery varied like the foot of the different Lord Chancellors.

The Clash of Equity and Common Law

The presence of the two courts led to the inevitable clash between the court of Common Law and the
Court of Chancery. Litigants that weren‘t satisfied with the judgement at the Common Law Courts
instituted actions at the Court of Chancery in order to set aside the holdings of the Common Law court.
This greatly angered the common law justices. In the case of Neath vs. Rydley[2] the court held that
where a matter can be directly traced to common law, a litigant can‘t institute an action for the same
matter in the court of Chancery.
Lord Justice Coke took it further in the case of Courtney vs. Glanvil where he threatened to imprison
anyone who, after getting a judgement at the common law courts, went to the court of chancery to have
it overturned.

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Matters came to a head in the Earl of Oxford’s Case. In this case, the plaintiff – who had a lease on a
piece of land – built a house on it and also planted a garden. The defendant, the owner of the land,
subsequently ejected him from the land and sought to make the house and garden his own. The plaintiff
sued at the Common Law court to prevent this. However, the Common Law court ruled against him.
He thus sought an injunction in the Court of Chancery to prevent the defendant from making away with
his house. Lord Ellesmere – the Lord Chancellor – ruled in the plaintiff‘s favour. He held that by the
laws of God, any man who built a house had the right to live in the house.
He also stated that where a judgement which causes injustice is brought to the court of Chancery, the
court would overturn the decision. The overturning of the decision would not be due to a defect in the
judgement but due to the hard conscience of the party who had judgement in his favour.
Lord Justice Coke – the Chief Justice of the King‘s Bench – and the other justices of the King‘s Bench
protested that the Lord Chancellor was trying to pervert the course of the common law.
The justices brought the matter before the King who referred it to Lord Francis Bacon for adjudication.
Lord Bacon ruled in favour of the Chancery. Subsequently, when there was a conflict between the
Common Law Court and the Court of Chancery, the court of chancery prevailed.
The two courts remained separate till the Judicature Act of 1873 consolidated both courts into the
Supreme Court of the Judicature.

Definition And Historical Development Of Trusts

The oft quoted and predominantly accepted definition of a trust is that provided by Keeton. According to
him:
All that can be said of a trust therefore, is that it is the relationship which arises whenever a person
called the trustee is compelled in equity to hold property, whether real or personal, and whether by legal
or equitable title, for the benefit of some persons (of whom he may be one and who are termed as ces tui
que trust) or for some object permitted by law, in such a way that the real benefit of the property
accrues, not to the trustee, but to the beneficiaries or other objects of the trust.

Historical Development Of Trusts

The trust was created as an answer to a unique legal problem. Under the English feudal land holding
system, the highest interest that an individual could obtain in land was the estate. This estate may be fee
simple, fee tail or life estate. Originally, estate was granted to a tenant upon undertaking to fight for the
landholder in times of war but from the 11th century downwards and the steady reduction of armed
conflict, this arrangement became less lucrative for the landholder.
Due to this, landholders developed other ways to benefit off the land they had pledged to the tenant such
as requiring rent. Two notorious devices that landholders used to benefit off land were the Escheat and
Wardship. Escheat occurred where a tenant died intestate. In such instance, reversionary interest would
operate on the land and the overlord was free to grant it to another tenant. While Wardship occurred
where the tenant died with an heir that was still a minor and the overlord took wardship of the land and
child. The overlord was entitled to all the profits and income from the land under this scheme, until the
minor became an adult. He was in turn responsible for the upbringing of the minor.

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So these arrangements ensured that the overlord would be entitled to enjoy the land of his tenant if either
of the envisaged scenarios occurred. It would have been a simple thing to avoid these consequences by
disposing of the land appropriately by will. However, testamentary disposition of land was prohibited at
the time as land was considered personal to the holder and could therefore not survive him. This meant
that a landholder could not create a devise of land in favor of his heirs, neither could he transfer them to
heirs that were below the age of majority. He was thus open to the operation of either the Escheat or the
Wardship.
Due to this hard situation that the tenants found themselves in, the Use was created. The principle
behind the Use was simple. The tenant (now called a feoffor) would transfer his fee simple interest in
the land (in a transaction called a feoffment) to another called a feofee, who would be bound to hold it
for the use of his heirs. Thus, in one stroke, the Use was able to beat both the Escheat and Wardship as
well as the Common law rule that prohibited testamentary disposition of land especially as a feoffment
made during one‘s life would achieve the same effect as a will.
It must be noted that the entire feoffment was informal. If the undertaking of the feofee to use the land
for the benefit of the heir was made a formal condition, the land would automatically revert to the
feoffor‘s heir (aka the landlord) upon breach, thus frustrating the feoffor‘s attempts to make a
testamentary disposition to a third party, if that was his wish.
And if the right of the beneficiary was made a legal condition, the contract would be void at law.
However, this informal nature was also the Achilles heel of the Use. It meant that the beneficiary would
have no legal recourse if the feofee reneged on his promise (and it was no more than a mere promise).
Equity and the courts of Chancery stepped in and began to enforce the use, thereby instituting the
principle of trusts.

Breach Of Trust And Remedies For Breach Of Trust

A breach of trust occurs when a trustee acts contrary to the dictates of the trust instrument or where he
fails to act as instructed by the terms of the trust. Thus, where he neglects, fails or refuses to do what he
ought to do or does what he is not instructed to do, he would be liable for a breach of trust.
A trustee may even be held in breach of trust for failing to act in the overall interest of the trust or the
beneficiaries even where such act may not strictly be within the terms of the trust. As facetiously put by
Lindley M.R in PERRINS v BELLAMY (1889) 1 Ch. 797, ‗the great use of a trustee is to commit
judicious breaches of trust‘.
Thus, the trustee may even be held liable for failing to commit a judicious breach of trust by doing some
thing that, though unauthorized, is for the overall benefit of the trust or beneficiaries. As held by the
court in LEE v BROWN (1798) 4 Ves. 369, the trustee will not be held liable for an unauthorized act
that would have been authorized by the court eventually. As such, he should commit technical breaches
of trust when it favours the beneficiaries. Although, the court in that same case was of the opinion that it
is more prudent overall to seek approval where the circumstances permit.
In light of the above, there are several acts that may amount to breach of trust. Perhaps unfairly, even
innocent or well-intentioned missteps by the trustee can and have been held to amount to breach of trust.
And the consequences are not pretty either.

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When a trustee has been found to be in breach of a trust, remedies would ordinarily lie to correct the
breach and restore the beneficiaries and the trust, as nearly as possible, to the position they were in
before the breach.
Remedies for breach of trust
In line with the appropriate rules of Equity, beneficiaries of a trust will not be left without remedy in the
event of an anticipated or completed breach of trust. These remedies will be discussed below.
Injunction
An injunction would lie to prevent a breach of trust by a trustee. If the beneficiary anticipates that it‘s
likely there‘d be unauthorized dealing with the trust property, he can apply to the court for an injunction
to prevent such dealing or, in appropriate cases, apply for an injunction to compel the trustee to act in
accordance with the terms of the trust. See BALLS v STRUTT (1844) 4 Hare 67.
In the case of MILLIGAN v MITCHELL (1833) 1 My & K 446, an injunction was granted to restrain an
election of an unqualified person as minister by the trustees of a church. In DANCE v GOLDINGHAM
(1873) 8 Ch. App. 902, the court restrained an improvident sale of property. Also, in RIGALL v
SHIPWAY, the court restrained an unauthorized mortgage.

Personal Remedy against The Trustees

In deserving situations, a trustee would be personally liable for breaches of trust occasioned by his
action or inaction. In this wise, his liability may extend to reimbursing the beneficiaries for unauthorized
dealing with the trust property or even to imprisonment for fraud and indiscretion.
There are many components of this personal remedy though. They may be examined as
follows: Liability
First off, the liability of trustees is personal, not vicarious. This means that each trustee is individually
liable and cannot be held accountable for the default of others unless in specific instances. The principle
is espoused in s. 24 Trustee Act and s. 21 Trustee Law which provide that a trustee is only chargeable
for money and securities actually received by him, notwithstanding that he signed any receipt for it and
is only answerable for his own acts, receipts, defaults or neglect, unless same happens through his
willful default.
See TOWNLEY v SHERBORNE (1634) Bridg. J 35 where the court held that trustees are individually
liable unless there is evidence of ‗dolus malus, or any evil practice, fraud, or ill intent‘ that permitted a
breach by another trustee. In this case, the trustee who had signed receipts alongside other trustees, was
held liable though he received nothing of the embezzled funds because he had done ‗evil dealing‘ by
leaving the received money in the hands of his cotrustees.
Also, in BOARDMAN v MOSMAN (1779) 1 Bro. C.C. 581, the court held that a trustee may be liable
for breach of trust if he discovers a breach by his co-trustees and conceals it. Where the trustee is newly
appointed, he is not liable for prior breaches but he will be liable if he discovers a prior breach and
conceals it. Also, a retiring trustee may be liable if his retirement was for the purpose of facilitating a
breach.
In WILKINS v HOGG and BOOTH v BOOTH (1838) 1 Beav. 125, the court held that a trustee will
also be liable if he acquiesces and stands by, knowing that the other trustees are committing or even
meditating the commission of a trust of if he leaves the trust in their hands without inquiry.

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Even though mere signature of receipt in consequence of a duty to sign does not ground liability, the fact
that he signs gives him notice that some money was paid so that he will be liable if he allows the money
remain with co-trustees inordinately or without inquiry.
However, it is important to establish that a trustee will not be endlessly liable personally for his actions
or omissions. He will only be liable to the extent that his actions were due to willful default. Default, in
this case, is willful when the trustee ‗knows what he is doing and intends to do what he is doing‘.
Where liability is alleged, the burden of proof is on the one alleging, as held in RE: BRIER (1884) 26
Ch. D. 238. The trustee may however be exempted from liability by a clause in the trust instrument.
Where this is the case, he cannot be held liable. See WILKINS v HOGG (1861) 5 L.T 467
As far as executors are concerned, they are also personally liable only. This is because each executor has
full control over pure personalty and can fully deal with it all on his own. Thus, if he deals with it alone
or even in conjunction with another executor, there is stronger probability that he has unlawfully
received the money. Even if he can disprove unlawful receipt, he may still be liable if he unnecessarily
allows the money get into the hands of his coexecutor or remain there.

Measure of liability
There are two heads of liability here: capital liability and interest liability. Capital liability arises where
the breach of trust occasioned loss to the trust property or estate while interest liability arises where the
trustee has made an unauthorized investment that results in the trust property being partly or wholly lost.
Thus, as far as capital liability is concerned, if the trustee does anything to occasion loss to the trust
property, he is liable for the loss to the extent that the trust property is affected.
However, if a profit accrues from any unauthorized dealing, the beneficiaries may claim it. And if they
adopt the transaction that causes loss, that is the end of trustee‘s liability in that respect.
With respect to interest liability, the measure of interest depends on the discretion of the court, although,
interest is now usually awarded at 4% of the loss occasioned by the unauthorized or contrary dealing by
the trustee as decided in RE: DAVY (1908) 1 Ch. 61. However, interest may be more than 4% in the
following cases:
 Where the trustee has received more than 4% from the dealing. See RE: EMNET‘s ESTATE
(1881) 17 Ch. D. 142
 Where he ought to have received more than he did for the transaction, interest may be charged on
how much he should have received
 Where he is presumed to have received more, the beneficiaries can claim either 5% or the profits
actually made by the trustee
 Where the trustee is guilty of fraud or serious misconduct, he may be charged with 5%
compound interest
Impounding trustee’s beneficial interest
In the case of RE: DACRE (1916) 1 Ch. 344, the court held that where a trustee who has beneficial
interest in the trust is guilty of breach, he will not be allowed to receive any part of the trust fund until he
has made good his default. If he fails to make good on the breach, then his part can be used to offset his
default. The rule is that he is deemed to have received his share to the extent to which he is in default.

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The rule will also apply to interests he acquired derivatively i.e. by purchasing or inheriting a benefit
under the trust. It is deemed that his beneficial interest is conditional upon him doing a good job in
administering the trust.
Further, where he assigns his interest in the trust, his assignee is in no better position than he is. This
would still be the case even if the default was committed after assigning his beneficial interest.
However, the interest cannot be impounded if the person does not become trustee until after the
assignment.
If he holds two distinct funds on distinct trusts with a beneficial interest in one and not the other, the
court has no power to impound his interest in the beneficial trust to make good on a default in the other.
Imprisonment
As was held in IRBY v IRBY (No. 3) (1858) 25 Beav. 632, a trustee may be imprisoned for not more
than a year if he fails to pay any sum in his possession or under his control as ordered by a court of
Equity. In that case, the trustee was found guilty of misappropriation and sentenced him to
imprisonment. The same will apply to auctioneers and executors. See CROWTHER v ELGOOD (1887)
34 Ch. D. 691.
Defenses
A trustee is not expected to lie down and die when there are allegations of breach or misconduct against
him. Since his duties are onerous and his punishment even more so, he is given a number of defenses
that he can rely on to show his non-liability.
Relief by the court
The court, by virtue of s. 61 Trustee Act, is empowered to relieve a trustee, either wholly or partially,
from personal liability for a breach of trust if he acted honestly and reasonably though he omitted to
obtain direction from the court before the breach. This extends to executors as well. Thus, this defence
builds on the principle of ‗willful default‘ in liability.
Before the court grants the relief though, the burden of establish honest and reasonable action lies
squarely with the trustee. He must show at least that he was as prudent as he would have been in relation
to his own affairs (although this is a shaky measure of non-liability, he may be naturally tardy in his own
affairs). In RE: KAY (1897) 2 Ch. 693, it was however held that there‘s no general rule as to the
circumstances where a relief will lie. The court goes from case to case.
The onus of proof on a paid trustee is much higher though. This is because, been a man of skill and
having been hired for that skill, he should exercise a much higher standard of diligence and knowledge
and will be held to greater account.
Lapse of time
The previous position under the Trustee Act was that a claim against an express trustee for breach of
trust could not be barred by mere lapse of time and even the expression ‗express trustee‘ included many
constructive trustees.
However, s. 31(1) Limitation Act now stipulates that, in the absence of express provisions to the
contrary elsewhere, an action by a beneficiary to recover trust property from a trustee or in respect of
any breach of trust shall not be brought after six years from the date on which the right of action
accrued. This provision protects personal representatives, express, implied and constructive trustees etc.

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However, there would be no period of limitation in respect of an action by a beneficiary in respect of
fraud by the trustee or to recover trust property or its proceeds in the possession of the trustee and
converted to his use.
Time begins to run against the beneficiary when the breach of trust was committed, whether he knew of
it or not. But if he was under a disability, time does not begin to run until the disability is removed. If his
interest is reversionary, time only begins to run when his interest falls into possession.
If one beneficiary is barred, then even if another beneficiary brings proceedings against the trustee and
benefits, the barred beneficiary cannot also benefit.
Discharge in bankruptcy
If a trustee goes bankrupt and obtains a discharge, he is free from further liability in respect of a breach
of trust except the breach was fraudulent and he was a party to the fraud.
Beneficiary acquiescence
Acquiescence here means that the beneficiary knew about the full facts and failed or refused to take
action or concurred in the breach of trust. In such case, he is deemed to have acquiesced. There are two
consequences that may arise from acquiescence.
First, he cannot proceed against the trustee for the breach in which he has acquiesced. However, he must
be sui juris. If he‘s not, he may still be able to proceed against the trustee, not being a party to fraud, if
he can show that he was an infant and even if he was of full age, he can show that he was under undue
influence from his parents.
Second, if another beneficiary proceeds against a trustee that was instigated to commit the breach by a
beneficiary, Equity can order the trustee to be indemnified from the interest of the instigating
beneficiary. See s. 62 Trustee Act. However, the order will not be granted unless the beneficiary knew
of the facts that constituted the breach of trust. The court has discretion to act though.
Release or confirmation by beneficiary
If the trustee is subsequently released from by the beneficiary, it operates as a bar to liability. However,
the beneficiary must have been of full age and must have been aware of the full facts constituting the
breach. It‘s not clear if the trustee has a right to demand release ordinarily upon completing his
trusteeship but he should be able to settle his accounts and not have the spectre of a legal suit always
hanging over him.
Contribution and indemnity
It should be remembered first, that liability of a trustee here is personal and will only be vicarious where
others are guilty of some willful default. In the event that more than one trustee is liable for the breach,
they may be proceeded against jointly or severally (individually). The judgment may also be executed
against any single one of them and if one of them partly pays up but the other goes bankrupt, the
beneficiaries can claim for the full judgment sum in the bankruptcy proceedings.
As regards contribution, where one liable trustee has to bear the burden of the judgment, he is entitled to
claim contribution from the others. The rule is that the trustees must bear the burden equally but it‘s not
clear if the trustee can sue for contribution or if he can even be entitled to contribution for fraud.
Although they may now be allowed in the latter case.
For indemnity, a trustee will be liable to indemnify the others for any judgment debt where:

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  He received the trust money and appropriated alone or if the only one that is morally guilty
 He acted as solicitor to the trust and the breach was caused by reliance on his advice
 He is a beneficiary. The rule here is that the breach will be made good as far as possible out of
his own beneficial interest even before contribution kicks in. If he was the subject of his breach,
he is not entitled to remedy either.

Proprietary Remedy against Trust Property: Tracing

The case of RE: DIPLOCK (1948) Ch. 465 was an extensive study into the nature and extent of the
remedy of tracing. The remedy allows a beneficiary to follow or trace trust property that is in an
identifiable form even if it has left the hands of the trustee and entered that of a third party.
This is great for a beneficiary because (a) it is available where there is no effective personal remedy
against the trustee (imprisonment cannot restore trust property especially where the trustee is insolvent);
and (b) even if the third party goes bankrupt, the beneficiary has first choice on his property as he‘s a
secured creditor by law.
Thus, tracing can be one of the most effective remedies available to a beneficiary. It can however be
obtained only if the circumstances are right. It is apt to consider tracing from the Common Law
perspective and tracing at Equity.

Following at Common law

At Common law, property was only identifiable so long as it did not become mixed up with other
property. As was held in RE: DIPLOCK, property purchased with the claimant‘s money could also be
traced provided there was no admixture as the law could proceed on the basis that the purchase is an act
capable of being ratified. Thus, as long as the property was identifiable, the remedy of tracing was
available.
However, limitations abounded. First, there was no recognition of equitable rights at Common law so
tracing was unavailable to them. A beneficiary could only obtain the remedy by joining the trustee to the
action. Second, the remedy was quite limited as it shied away from tampering with mixed funds. So the
remedy was gone as soon as it could be shown that the funds had been mixed.

Following in Equity
Equity, on the other hand suffered no such shyness. If the Common law was content to halt its tracing
―outside the bankers‘ door, Equity had the courage to lift the latch, walk in and examine the books. See
BANQUE BELGE v HAMBROUCK (1921) 1 KB 321.
However, there are conditions that must be satisfied before Equity will exercise this considerable
discretion in the favour of a beneficiary. It must be shown that:
The property is traceable
In many cases, tracing is easy. In many other cases, like where money is mixed with other money in a
bank account, tracing is not so easy. When there has been an admixture of money or property, it is for

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the trustee to prove what property belongs to the trust and which is his own. If he cannot distinguish
satisfactorily, the entire will be treated as trust property. See RE: TILLEY‘s W.T (1967) Ch. 1179.
Where the trustee has made an attempt at distinguishing, the court can also apply its own rules before
arriving at its finding. This is the rule of appropriation of payments and it has wider application than in
just tracing. The rule is that whatever a debtor pays is to be applied according to the mode that is laid
down by him. The rules applied as follows:
 First right to debtor: As stated earlier, a debtor has the right to dictate which of his debts his
payment is to be applied to. His direction may be express or implied. He must however make this
direction at the time of making the payment. Inward intention is not sufficient. See PARKER v
GUINESS (1910) 27 TLR 129
 Second right to creditor: If the debtor does not direct/appropriate the payment to any particular
debt, it falls to the creditor to make the appropriation. He can do so at any time, even in the
witness box in an action. He can decide to appropriate either way, even to the statute barred debt.
However, he can‘t appropriate to an illegal item if a legal item is still unpaid. See WRIGHT v
LAING (1824) 3 B & C 165
 The rule in CLAYTON’s case: Also known as the rule of convenience, the rule in
CLAYTON‘s case (1816) 1 Mer. 572, will apply where there is no express appropriation either
way. It only applies where there is a current unbroken account i.e. the same transaction and not
separate/distinct debts. The rule is that, in the absence of express intention to the contrary, each
payment is appropriated to the earliest outstanding debt that is not statute barred. Thus, it is first
in, first out. If the accounts get broken, then the entries before the break cannot be affected by the
entries after the break. See RE: SHERRY (1884) 25 Ch. D 692. Although, the bank may treat
two similar but separate accounts as the same. The rule is displaced if a contrary intention is
shown by the parties.
 The rule in RE: HALLET’s ESTATE: The rule in Clayton‘s case is sometimes excluded by
this rule. The rule is that where a trustee withdraws money from a bank account that contains
both his personal funds and trust money, he is deemed to draw on his personal funds first
because the presumption is against a breach of trust. The rule applies to more than mere money
though. It also applies to shares in a company. See BRADY v STAPLETON (1952) 88 CLR
322.
 Overdrafts: If the trustee overdraws on his account (withdraws more money than he has) and
then pays in trust money to reduce the deficit, the account and any property purchased with that
overdrawn money will be charged with repayment of the trust money. However, the purchased
property remains that of the trustee.
Once the trust property gets dissipated, tracing becomes impossible. Thus, if it is exhausted, it ceases to
exist and tracing is at an end. See RE: DIPLOCK. This would be the case if it was spent on consumables
that are then consumed or if it is used to repay secured or unsecured loans.

There is an equity to trace

Even where the trust property is traceable, there would be no Equity to trace unless s fiduciary
relationship exist. It is not enough to show a case of unjust enrichment. Thus, it is necessary to prove the
trust relationship. See RE: DIPLOCK.

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Tracing will not produce an inequitable result
Tracing must not be contrary to equitable principles. Thus, it was held in SINCLAIR v BROUGHAM
(1914) AC 398 that the right to trace cannot be exercised against a bonafide purchaser for value without
notice. There also can be no tracing claim by claimants that have acquiesced in the mixing. See BLAKE
v GALE (1886) 32 Ch. D 571
Equity will not also allow tracing where the result will work injustice. For instance, if a volunteer has
taken trust money and used it to alter or improve his property, tracing would force him to sell the
property in order to make good on the trust money. This would however be equitable as the alterations
may not have increased the market value of the property and it would be unjust to deprive him of the
whole of his house. However, if the trust money was used to purchase property, the effect would be
different as it would give both volunteer and beneficiary equal share in the property. See R v DIPLOCK
Effect of right to trace
Generally, the situation is relatively simple when a trustee has appropriated the funds of a single trust
and mixed them with his own funds. The rules as disclosed above will apply. However, it is a bit more
difficult where the trustee combines the funds of two or more trusts in his account or issues of interest
on the appropriated trust money.
 First charge: Where the trustee has mixed funds in his account, consisting of trust money in
part, the general rule is that the beneficiaries are entitled to a first charge on the account or on
any land, securities or assets purchased with the money. See. RE: PUMFREY (1882) 22 Ch. D.
255. However, if the trustee uses the first part of the money in his account to purchase shares and
what is left is enough to repay the trust money, the rule in RE: HALLET‘s case would ordinarily
apply. What then happens if the trustee dissipates what is left in the account? The rule is that the
charge will attach to the entire fund i.e. the trustee will be entitled to be paid out of the value of
the shares and if a profit is made, they are also entitled to a proportionate amount of the profit.
 Equal Equities: What happens in the event of mixed funds from separate trusts? The first step is
to identify the money that has been mixed. After identification, the rule in CLAYTON‘s case
will apply. Where the rule in CLAYTON‘s case does not apply, the beneficiaries of the separate
trusts will share the money pari passu either with each other or with volunteer. See SINCLAIR v
BROUGHAM.
 Interest: There is no general right to interest on property that has been traced. However, if the
funds have been used in an asset that has appreciated, the beneficiaries are entitled to a
proportionate amount of the profit.

Personal Remedy Against Recipients Of Trust Property

Where the property is not identifiable or where it has been dissipated, tracing fails. In such instances,
Equity may give the claimant a personal remedy against the person that wrongly received the trust
property. This has been applied in several cases of payment to the wrong person under a will or intestacy
but is not so well established in cases of trusts.
Termination Of A Trusteeship
All things come to an end, and the appointment of a trustee is no different. At some point, the trustee
will end his relationship with the trust. This end can be voluntary, enforced or by operation of law.

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Disclaimer
As a general rule, no person can be compelled to be a trustee against his will. Thus, a person appointed
as trustee may disclaim the office at any time before acceptance. In the interim, if he does anything
tending to show that he has accepted the trust, such as interfering with the trust property, his intention to
disclaim may be disputed.
The disclaimer may be express or implied. Where express, it may by deed and where implied, it may be
apparent from apathy (refusal to act) if the apathy is consistent. See RE: CLOUT & FREWER‘s
CONTRACT (1924) 2 Ch. 230.
The disclaimer must be made timeously though. If the person disclaiming was sole trustee, legal title in
the trust property reverts to the settlor or his personal representative until a new trustee is appointed.
The exception to right of disclaimer is in constructive or resulting trusts. In these instances, the trustee
has no option to disclaim.
Retirement
Generally, a trustee cannot retire. It‘s a life office and he‘s in it for the long haul. However, he may
retire in appropriate circumstances. These include:
 Provision in the trust instrument
 Under statutory provision e.g. s. 24 Trustee Law allows a trustee to declare by deed that he
desirous of being discharged from the trust provided that there will be at least two trustees left.
However, the remaining trustees and the person empowered to appoint new trustees must consent
to the discharge.
 By authority of the court. This may be in consequence of s. 25 Trustee Act or under the inherent
powers of the court. The court may also impose whatever conditions it sees fit before the
retirement can take effect, such as requiring reasonable grounds for retirement of the trustee.
 By consent of the beneficiaries. It must be unanimous consent.
Removal
A trustee can be removed from his office in any one of the following ways:
 Under a power contained in the trust instrument. It must be for the reason and in the manner
specified.
 Under statutory provisions e.g. where the trustee remains outside Nigeria for up to 12
uninterrupted months, as provided by s. 10 Trustee Act and s. 24 Trustee law or where he
refuses, or is incapable of acting.
 By order of the court under s. 25 Trustee Act (if the continued acting of the trustee will be
detrimental to the trust [breach of trust]) or in consequence of the inherent powers of the court.
See ADESEYE v WILLIAMS (1964) 2 All NLR 37 where the beneficiaries alleged that the
trustees were not in accord. Although, the court found that the trustees were in accord, it held
that ―a trustee will be removed if the court is satisfied that his continuance in office will be
prejudicial to the performance of the trust and to the interest of the beneficiaries, or if the trustee
has disregarded his duties.‖ Also, in REMMER v REMMER (1961) 1 All NLR 233 the court
granted an application to remove a trustee on the ground incompetence due to ill health. See also
ADEMOLA v SODIPO (1992) 7 NWLR 251 where the trustee was alleged to be impartial.

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Death
Death brings an end to all things, including trusteeship. If the trustee was acting alone, the trust property
devolves on his personal representative who is also free to accept or reject the office. However, in the
states formerly in the western region, the personal representative is obligated to act as trustee until
another is appointed. See s. 10(12) Trustee Law
If there is more than one trustee, the trust estate devolves on the surviving trustees in consequence of the
rule of jus accrescendi (right of survivorship).

Duties Of A Trustee
The duty to act as a trustee is considered a very important one. It carries great responsibly and should
not be taken lightly, primarily because the court does not take it lightly. So misconduct on the part of the
trustee can attract severe sanction from the court, criminal and civil. Perhaps, the reason for this is the
root of trusts, particularly the untrustworthy nature of several early trustees.
The duties that fall upon the trustee are numerous. They may be examined as follows:
Duty To Collect And Secure The Trust Assets
This is the first important duty of a trustee. As soon as he is appointed and accepts his appointment, the
trustee should inquire about the nature and extent of the trust property, its whereabouts, locate and
secure them. He secures them by taking possession and if intangible, or equitable, by giving notice to the
legal owner.
If he has any doubt as to the extent of the trust property or his powers in relation to them, he is obligated
to seek legal advice. In the case of NESTLE v NATIONAL WESTMINSTER BANK (1993) 1 WLR
1260, the trustee bank had doubts as to the exact nature and extent of its powers as expressed in the trust
instrument. The court held that it was inexcusable that the bank to no step at any time to obtain legal
advice as to the scope of its powers.
Thus, the trustee must ensure the trust property is properly transferred to him, take inventory and take
possession unless the beneficiaries are sui juris (of age) and determine the trust.
Duty To Invest
Another primary duty of a trustee is the duty to invest the trust funds, where the trust consists of money
or is money producing, in order to grow it. he must invest in such a manner that yields profit and does
not erode the trust funds.
The Trustee Investment Act, in s. 3(1), empowers the trustee to invest in any of the securities mentioned
under s. 2 of the Act which are:
 Securities created or issued by or on behalf of the federal government
 Securities created or issued by the state government which are gazetted
 Debentures and full paid up shares of any public company incorporated under CAMA
As was held in RE: WHITLEY (1886) 33 Ch. D. 347, the trustee, when making the investments, must
exercise such due care as an ordinary prudent man of business would.

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Duty To Distribute
When the trust instrument empowers him to do so, the trustee has a duty to distribute/disburse/apply the
trust property to the named objects, as directed by the trust instrument as and when due. if he fails to do
this or does it incorrectly, he may open himself to liability.
According to s. 18 Trustee Law, in order to avoid paying to the wrong persons, the trustee should
identify the correct beneficiaries by notice in the state gazette or a newspaper widely read in the area that
the trust property is situated.
If there is uncertainty as to the existence or location of a beneficiary i.e. where he cannot be identified,
traced or said to be living or dead, the trustee may apply to the court for direction. In such instance, the
court can protect the trustee by making a ‗Benjamin Order‘, as laid down in RE: BENJAMIN (1900) 1
Ch. 723. This order directs the trustee to make the payment and protects him from personal suits by
beneficiaries that have been left out after all reasonable and practical search has been made for them.
Duty Not To Delegate
Except as provided by the trust instrument, the trustee has a duty to act personally in respect of the trust
at all times. This is in consequence of the rule: Delegatus non potest delegare. If he delegates contrary to
the trust instrument, he will be responsible for any loss that arises from the actions of the agent.
However, the trustee, where it reasonably necessary or in the ordinary course of affairs, may delegate his
duty. He cannot delegate the exercise of his discretion though unless expressly permitted by the trust
instrument.
Duty To Act Gratuitously
By the rules of Equity, a trustee is a volunteer and is expected to act without remuneration,
notwithstanding the great tasks placed on him. However, he may be remunerated if in certain
circumstances:
 Authorization by the trust instrument
 Authorization by statute e.g. s. 19 Public Trustee Law
 Authorization by the court in appointment of a judicial trustee
 Remuneration to a corporation
 Authorization by all the beneficiaries in agreement
Duty To Account
The trustee must account to the beneficiaries for all trust property once such information is required. To
this end, he has a duty to keep accurate accounts and allow the beneficiaries access to same when they
require it.
If he fails to account, he may be compelled to do so by the court on application by the beneficiary.
Duty To Avoid Conflict Of Interest
The trustee must be loyal to the trust. He should not act in his own interest, to the detriment of the trust.
This is allied to the rule that a trustee should not purchase trust property because he cannot be expected
to sell it to himself at fair price.

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Appointment Of Trustees
Having fulfilled all the conditions that a trust needs to become operative, it is essentially valid and can
be given effect. From this point, the duty falls to the trustee to take charge of the trust property and
enforce the trust.
In this respect, the trustee is the most important element in the enforcement of the trust as he is the one
who has the onus of carrying out the intentions of the settlor. Even if he accepts the appointment, as he
must before the trust can take effect, his appointment must still be regular. This section examines the
capacity of a trustee and the modes of appointing trustees.
Who can be appointed as a trustee?
Before a trustee can act in relation to a trust, he/she must have capacity to act. In this respect, there are
certain categories of persons that are competent to act in relation to trusts. They include the following:
Individual Persons
Generally, any person that that has legal capacity to hold property and dispose of same can be appointed
as a trustee. So long as the person is competent to deal with the trust property as directed by the trust and
has no disability by nature or law.
Dishonest, irresponsible or fraudulent persons cannot be appointed as trustee either. If appointed, the
court can set such appointment aside.
Infants
However, the general position concerning infants is that they cannot be expressly appointed as trustees
of legal estates in the states comprising the former western region i.e. Ogun, Oyo, Osun, Ondo, Ekiti,
Edo & Delta states. The PCL, in s. 18 particularly, provides that: The appointment of an infant to be a
trustee in relation any settlement or trust shall be void, but without prejudice to the power to
appoint a new trustee to fill the vacancy.
Thus, an infant cannot be appointed as a trustee under the PCL. Exceptions abound though. They
include:
 If the infant is appointed, he may be removed but this does not prejudice his right to be trustee in
future once he comes of age
 An infant may be appointed on a resulting trust. See RE: VINOGRADOFF (1935) WN 68 where
a 4-year old was appointed trustee on a resulting trust
 In parts of Nigeria other than the western region, an infant may be appointed as an express
trustee of personalty
 In s. 17(3) and s. 4 PCL, where an infant is appointed as trustee together with other persons of
full age, the trust shall operate as if the infant was not named but this shall be without prejudice
to any interest in the land intended to be provided for the infant
Married women
Under the provisions of the Married Women Property Act 1882 and the Married Women Property Law,
Western Region 1959, married women are competent to act as trustees. This was not the previous
provision though as a restriction was placed on married women, especially in consequence of the rule
that a married woman cannot own property independent of her husband.

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Beneficial trustees
Should a beneficiary be appointed as trustee? While there‘s no law against such appointment, the court
generally frowns against it. This is because there may be conflicts of interest inherent in such
appointment. It stands to reason that a trustee cannot be expected to be objective where his personal
interest is at stake.
Corporations
Corporate bodies are empowered, under ss. 37 & 38 CAMA, to exercise all the powers of a natural
person, including the power to acquire and own movable and immovable property. Thus, they can act as
trustees. However, this is subject to their being so authorized by their memorandum or articles of
association. They are different from trust corporations though.
Trust corporation
A trust corporation is an institution, such as a bank or insurance company, that undertakes the business
of being executors or trustees for fees. They are exceptions to the general rule that trustees should not be
remunerated for their activities except where it is provided in the trust instrument.
They are also subject to their articles and memorandum though and they must have been properly
incorporated under the CAMA. The advantage with using these corporations is that they don‘t generally
fail. So they can hold the trust property for as long as is needed.
Public Trustee
A public trustee is a corporation sole and even where he is a sole trustee, there is never need to appoint a
new one since he never dies. This is because his office is statutory, as established by the Public Trustee
Act 1938. This position only applies to Lagos state now.
If the public trustee acts improperly leading to loss, the state will be liable to make good the loss.
Custodian Trustee
He could be a public trustee. His duty is basically to hold trust property and the documents relating
thereto while the general administration of the trust is left to a managing trustee. Thus, the duty of a
custodian trustee is simply to take care of the trust.
The advantage of this arrangement is it saves the time of having to vest the trust property anew every
time a new managing trustee has to be appointed. See FOSTER WILLIAMS v DEACON BANK LTD.
(1935) Ch. 758. Judicial trustee
He is appointed by the court in consequence of the powers conferred on it by the Judicial Trustees Act
1896. His is appointed when it is found necessary that the administration of the trust be subject to the
supervision of the court.
The appointment is made on application to the court on the application of the settlor, an existing trustee
or a beneficiary. The appointment may become necessary where the administration of the trust has
broken down because of protracted litigation or gross mismanagement.
Solicitor To The Trust/Trustee
The solicitor to the trust is also competent to act as a trustee. See the case of RE: EARL OF
STANFORD (1896) 1 Ch. 288.

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Number Of Trustee
There is generally no requirement as to the number of trustees. However, the Trustee Laws and
Administration of Estates Law, Western Nigeria provides in s. 22 that there shall be a maximum of 4
trustees in cases of trust for sale of land. This would not apply though where the land is held for
charitable, ecclesiastical or other public purposes.
Although a single trustee can be appointed, it is desirable that there be a minimum of two trustees so
there can be proper administration and avoidance of fraud.
Modes Of Appointment Of Trustees
A trustee can be appointed in any one of several modes. These may be by the settlor/testator through the
trust instrument, by the court or in exercise of a statutory power. The appointment may come either at
the time the trust is created or at any time during the continuance of the trust. In this wise, trustees may
be original (if appointed at the beginning of the trust) or new (if appointed in continuation of the trust).
By the settlor/testator
The testator or settlor may appoint the trustees either expressly, by naming the particular persons to be
trustees or impliedly, by delivering trust property to a person, on the understanding that they will hold
the property for the benefit of another. He may also appoint one person as a trustee, with power to
appoint additional trustees. If he intends to be a trustee, he can also appoint himself by declaring a trust.
The trustee may, instead of expressly appointing an individual as trustee, he may confer the power of
appointment on an individual or institution. Where he does so, the one conferred with the power to
appoint cannot appoint himself as trustee except in limited circumstances provided by s. 24(1) Trustee
Law Western Nigeria.
While it is advisable that the appointment be done in writing, it is better if it is done by deed especially
as it can be used to vest trust property in the trustee directly without a further conveyance, if it has a
vesting clause.
If the settlor fails to appoint a trustee, the court can appoint the original trustees, in consequence of the
maxim: Equity will not allow a trust to fail for want of trustees. On failure to so appoint though, or even
after exhausting his power of appointment, the trustee has no further power to appoint trustees to the
trust. See s. 10(1) Trustee Act 1893. However, this would not be the case where he has reserved the
power to appoint additional trustees under the trust instrument.
In exercise of statutory power
As provided under s. 10(1) Trustee Act 1893 and s. 24(1) Trustee Law, a new trustee may be appointed
in the following order:
 By persons nominated in the trust instrument. This power of appointment may be all
encompassing or limited to the occurrence of special circumstances. In special circumstances,
there may be a problem with determining if those circumstances truly exist. In RE: WHEELER
(1896) 1 Ch. 315, the existing trustees were empowered to appoint new trustees but only where
any of the existing trustees was incapable of acting. When one of the trustees became bankrupt
and the donee of the power to appoint sought to exercise his power, the court held that the donee
could not act in those circumstances.
 In the absence of a person nominated, the surviving or continuing trustees can exercise a power
to appoint new trustees. In RE: SHEPPERD (1886) We. 234, the two donees of the power to

17
 appoint could not agree on the selection of a new trustee. The court held that they were not able
and willing to act so the power could be exercised by the surviving trustees.
 Where either of the above cannot act or are unavailable, the personal representatives of the last
surviving or continuing trustees will have the power to appoint.
The circumstances that have been held to be proper for appointment in consequence of statutory power
are myriad. They include the event of death, refusal to act, discharge of a trustee, where a trustee is unfit
to act or where the trustee remains outside Nigeria for an uninterrupted period of 12 months.
By the court
The court may also appoint new trustees. It can do so inconsequence of two powers viz. its inherent
powers and in consequence of statutory powers.
The court, drawing on its equitable jurisdiction and as established by the court of Chancery, has an
established inherent jurisdiction to appoint new trustees where necessary and in the interest and welfare
of the beneficiaries. This power may be exercised in myriad circumstances including where the trust
instrument provides for no trustees or if a trustee is incapable or disqualified from acting.
The Trustee Act 1893, by its s. 25 and s. 28 of the Trustee Law, Western Nigeria empower the court to
appoint new trustees whenever appointment is inexpedient or where it is impracticable to perfect the
appointment without the assistance of the court. In exercising this power, the court, as was held in RE:
TEMPEST (1866) 35 LJ C. 632, must take into consideration the wishes of the testator, the interest of
the beneficiaries and the efficient administration of the trust.
Vesting Of Trust Property
As has been established above, trust property is not properly constituted if it is not fully vested in the
trustees. If the trust is incompletely constituted, it must be properly vested before it can take effect. In
such situation, the first thing the trustee must do is ensure the property is properly vested.
This can be done by showing that the trust falls under one of the exceptions to the rule against perfection
of imperfect gifts or by completing the process of vesting and doing whatever is necessary to vest the
trust property.
There would be no need to go through this where the trustee is appointed by deed or by the court. In
such situations, a vesting declaration or vesting order (by the court) is used and once used, no
conveyance or formality is required to complete the vesting. The trustee takes automatically. See s.
12(1) Trustee Act and s. 27 Trustee Law.
However, under s. 13(13) Trustee Act and s. 27(4) Trustee Law, legal estates of interest in land, leases,
mortgage, shares, stock etc. must be vested formally.
Completely And Incompletely Constituted Trusts
Where a trust has scaled through the three certainties and can be validly determined under any of the
classes of a trust, it is not fully operative yet. In order for the trust to become fully operative and capable
of being enforced, it must be properly/completely constituted first.
As has been made clear above, a trust can be created by will or by inter vivos declaration. Constitution
of trusts however has more to do with inter vivos declaration than creation by will. Thus, when a trust is
created during the lifetime of a settlor, the rule regarding complete and incomplete constitution of trusts
will apply.

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Completely Constituted Trusts
A trust is said to be completely constituted when the settlor has done all that is required by law to
properly vest title to the trust property in the trustee, seeing as he must possess the legal title in the trust
in order to be able to carry it out. It is only when the trust is complete that the beneficiary too can
enforce it.
The rationale behind this is simple. A trust is basically an ordinary transfer if title in property, coupled
with the added dimension that the property should be held for a beneficiary. Thus, it must first be
properly transferred in accordance with the laws governing transfer of property. There are different laws
when it relates to transfer of realty and personalty.
Transfer of realty
The rule, with regard to constitution of realty, is that it must be in writing, as required by s. 7 Statute of
Frauds and s. 77 PCL and registered as required by s. 3 Registration of Land Titles Act. This is the
requirement with regard to conveyance of legal interest in the property to the trustee.
If the settlor only possesses an equitable interest in the property or if he only wishes to transfer the
equitable interest in the property to the trustee, all he needs to do is evidence the trust in writing.
If the settlor is declaring himself as trustee for his own property, there is no requirement for conveyance.
His declaration must be in writing though, regardless of whether the interest is legal or equitable.
Transfer of personalty
For transfer of personalty, the rule depends on whether the property is pure personalty (incorporeal) or
corporeal property. If the property is corporeal, such as money, a car or other movable goods, mere
delivery of the property suffices. There is no requirement for writing. Once delivered, the trust is
complete.
If the property is pure personalty, there may be need for some documentation especially when the
property consists of shares, stock etc. In such cases, there would be a need to complete the necessary
transfer forms that evidence the transfer and registration with the appropriate authority. If the transfer
form is not filled, the trust is not complete. See MILROY v LORD (1865) 4 DF & J 260.
For other personalty, mere delivery suffices. If the trustee declares himself as trustee here too, the trust is
properly constituted upon his declaration.
Failure of the property to vest properly means it will not be enforceable either by the trustee or the
beneficiary as ‗Equity will not perfect an imperfect gift‘.
Covenants to settle
There are situations where the trustee enters into an agreement to transfer the trust property to the
beneficiary. This is a covenant to settle. Where such an agreement exists but was not fulfilled before the
death of the settlor, the beneficiary may enforce the agreement, subject to some conditions.
In order to enforce the covenant to settle, the beneficiary must be a party to the agreement and must
furnish consideration. This is because such an agreement is a contract and will be subject to the rules of
contract. Thus, the rules of privity and consideration apply.
Failure to furnish consideration means that the maxim: ‗Equity will not aid a volunteer‘ will have effect.
This means that a person that has not furnished valuable consideration has no remedy in Equity.

19
If the covenant is by deed though, the beneficiary need not furnish any consideration as agreements
made by deed not be supported by consideration before they can be enforced at Common law.
Incompletely Constituted Trusts
Once a trust fails to comply with the rules for valid constitution, it is said to incompletely constituted.
Thus, once there is something left to be done before the trust property can fully vest in the trustee, the
trust is not complete.
In the case of JEFFERY v JEFFERY, a father made a will in which he left both freehold and leasehold
of his estate to his wife. Later, by voluntary deed, he conveyed freehold of his estate to a trustee in trust
for his daughter. He also agreed to convey the leasehold to her but died before he could do so. The court
held the that daughter was entitled to the freehold, being properly constituted but that the agreement to
convey the leasehold was unenforceable as it was incompletely constituted.
Thus, as Lord Justice Turner declared in MILROY v LORD, ‗there is no equity to perfect an imperfect
gift nor will equity construe an imperfect gift as declaration of a trust.‘
Exceptions to the rule
Notwithstanding the foregoing, there are instances where an incompletely constituted trust will be
enforceable. They include the following:
The rule in STRONG v BIRD
According to the rule, where an imperfect gift is made inter vivos to a donee, it may still be perfected if
he is subsequently made executor or administrator of the donor‘s estate. Thus, if the gift was made in
consequence of an intention to create a trust, the trust becomes enforceable by operation of this rule.
In this case, the facts were that the defendant borrowed 1,000 pounds from his stepmom who lived in his
house, on the agreement that he will pay back by allowing her pay rent at a reduced amount. She
however paid the reduced amount just twice and paid in full till she died. Before her death though, she
appointed the defendant as her executor. On her death, the stepmom‘s next of kin sought to enforce the
debt owed her estate by the defendant. The court held that appointing the defendant as executor, was
indication of the stepmom‘s intention to forgive the debt and turn it into a gift since the executor cannot
be expected to sue himself for the debt he owes her. It was further held that the fact that the stepmother
had stopped payment of the reduced rent in her lifetime was indicative of her donative intention till she
died.
The conditions for the operation of the rule are that:
 The donor must have intended to make immediate inter vivos gift to the donee. If the intention
relates to the future and is not immediate, the rule will not apply
 The donor‘s intention to make the gift must have continued till the time of his death. Where
however, the donor has taken some steps which is at variance with the expressed intention to
make a gift, for example, by lending the property to someone else, the rule will not apply.
 The intention of the donor must relate to a specific item. If the intention is vague and does not
relate to some specific items, the rule will not apply

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Donatio mortis causa
This is a gift made in contemplation of death. It is conditional upon the death of the donee and will not
take effect otherwise. This gift can be enforced without consideration upon the fulfilment of the
following conditions:
 The gift must be made in contemplation of, not expectation of death. This means it must only
have been probable, not certain that the donor will die.
 The donor must have parted with dominion of the property. This means that the subject matter of
the gift or the means of control must have been delivered to the donee.
 The gift must have been made in such circumstances as to show that it will revert if the
contemplated death does not occur.
 The donor must actually die before the gift can be perfected.
The doctrine of proprietary estoppel
This doctrine, drawing from the general principle of estoppel, will operate to prevent an owner of
property who has made an imperfect gift or his personal representatives from denying or asserting the
beneficiary‘s right to the gift. In the case of DILLWYN v LLEWELYN (1862) 4 De. G.F. & J. 517, a
father asked his son to occupy a piece land and the son in consequence thereof, expended large sums of
money to build on the land. The father died without executing any document in favour of the son. The
son‘s claim to get the conveyance to himself on the property was upheld.
Dispositions under wills
As mentioned earlier, the rule as to constitution of trusts applies more to inter vivos trusts than trusts
made by will. Thus, when a gift is made by a will, it is eminently enforceable, regardless of absence of
consideration or privity.

Requirements For The Creation Of A Valid Trust

There are rules that govern the creation of a valid trust, essentials that it must contain in order to be valid
and enforceable. These requirements were outlined in the case of KNIGHT v KNIGHT by Lord
Lonsdale. They are also referred to as the three certainties. They are:
 Certainty of words
 Certainty of subject matter
 Certainty of object.
Certainty Of Words
The rule, in regard to certainty of words, is that the words used in creating the trust must be clear, direct,
unequivocal and unambiguous. They should not be ambiguous or vague. This is because the words used
in creating the trust are the most express indication of the settlor‘s intention to impose an obligation on
the trustee for the benefit of the object. The words used may be conditional, but they must evince a clear
intention.
In essence, the words used must not be precatory i.e. words that express hope, belief, desire, rather than
firm intention. See MUSSOORIE BANK LTD v. RAYNOR (1882) 7 App. Cas. 321 where a testator
gave his property to his wife in a will and ―feeling confident that she will act justly to our children in

21
dividing the same when no longer required by her.‖ The court held that no trust was created for the
children.
Where the words used in creating the trust are uncertain, the gift fails and the donee takes absolutely.
This is because an intention to create the trust cannot be properly ascribed to the donor.
Certainty Of Subject Matter
The property that will be subject of the trust must be in existence, identifiable, certain or at least, capable
of being made certain. This means that the donor cannot give a gift he doesn‘t have yet. If the gift is
destroyed or is otherwise non-existent at the time of making the trust, it fails.
Thus, the subject matter should not be referred to with general words like ‗property‘ or ‗part‘. For
instance, in SPRANGE v. BARNARD (1789) 2 Bro. C.C. 585, a testatrix gave property to the donee
(the testatrix‘s husband) ―for his use and at his death, the remaining part of what is left, that does not
want for his use‖ to be divided between her brothers and sisters. It was held that the donee takes
absolutely.
Where there is uncertainty of subject matter, the donee also takes absolutely. This is because while an
intention to create a trust is ascribable to the settlor, you can‘t appoint a trustee over trust property that
cannot be ascertained or that is non-existent.
Certainty Of Object
The object of a trust may be the beneficiary or cause. The rule is that the object must be clearly
identified or identifiable with certainty and the interest they are to take in the trust property must be
discoverable. Thus, where there is uncertainty as to the object, the trust fails.
The rule regarding certainty object will however be inapplicable in two instances. First, when the trust is
a discretionary one, giving power to the trustee to decide who the beneficiaries will be, the trust may be
held valid but on the condition that the trustee must have expressly stated an identified or identifiable
class of people from which the beneficiaries will be drawn. Second, charitable trusts can still be applied
where the object is uncertain, through the application of the cy-pres rule.
Where the object of a trust is uncertain, the trust fails and the property inures in a resulting trust for the
estate of the settlor.

Classification Of Trust
There are several types of trusts. Trying to attempt a watertight classification may be impossible as this
area of law did not develop in any organized fashion. As such, trying to impose the imperious order of a
watertight classification may be a foolhardy task.
Notwithstanding this, it is possible to adopt a loose categorization of these various types of trusts,
strictly for the purpose of achieving an understanding of their nature and incidents.
Trusts may generally be classified according to the nature of their object/purposes, in which case they
may be public or private; according to their form of creation, in which case they may be express,
implied, constructive, resulting etc.; or according to the efficacy of their creation, in which case they
may be completely or incompletely constituted.
Apart from these, there are also other trusts that do not properly fall within any one class. They will be
examined under the heading ‗other types of trusts‘. These categories will be treated seriatim below.

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Express, Resulting/Implied And Constructive
As mentioned earlier, the trusts that fall into this category depend on their mode of creation. Under this
heading, trusts may be created according to the unilateral/clear intention of the settlor/testator or by
operation of law. In the first sense, they are express and in the second sense, they may be implied,
constructive, resulting etc.
Express trusts
An express trust is created by the clear declaration of the owner of property, either that he is to hold the
property for the benefit of another, or that some other person should hold the property for the benefit of
a named beneficiary or object. It is express because there is no doubt as to its creation or the intention
behind it.
There is generally no need for any formality in creating an express trust. It can be created in writing or
orally or any way the settlor decides. The most important thing is that the intention to create a trust be
very clear on the part of the trustee. The trust may be created and made to operate during the lifetime of
the settlor. Where it is so created, it is called an inter vivos trust. However, there are two exceptions
where formalities are imposed for the creation of the trust.
 Where the trust is inter vivos and the property to be subject of the trust is realty, the law requires
that it be evidenced by a written memorandum. See s. 9 Statute of Frauds 1677 and s. 16 Land
Registration Law, Kwara.
 Where the trust is not inter vivos, but meant to take effect after the death of the settlor, it must be
in writing and comply with the requirements of the Wills laws. See s. 9 Wills Act and s. 7 Wills
Law, Kwara. This condition would operate notwithstanding that the property is realty or
personalty. In effect, the trust, in this instance, must be evidenced in a valid will. Apart from the
requirement that the wills be in writing, they are also required to disclose the identities of the
beneficiaries.
The essence of these exceptions was to prevent fraud in relation to property. It would be extremely easy
for a person to deliberately ‗misconstrue‘ the intention of a ‗settlor‘ and believe that a trust was created
in their favour, when in fact it wasn‘t. If the settlor is dead or unable (due to health), such person could
easily get away with fraud.
However, these requirements will not operate in all situations, for the simple reason that they were made
to prevent fraud and Equity will not sit by and watch where they are, absurdly, used as instruments of
fraud. This principle was well espoused in the case of BANNISTER v BANNISTER.
In that case, the plaintiff, the widow of the defendant‘s brother, inherited two cottages from her husband
on his death. She decided to sell the property to her brother in law but agreed to sell for 150 pounds
lower than the market rate, on the condition that he would let her live in one of the cottages until her
death. In effect, she created a trust in her own favour, with her brother in law as the trustee. After the
conveyance, the brother in law reneged on the deal, arguing that the transaction ought to have been
evidenced in writing, as per the provisions of the Statute of Frauds. The court, dismissing his argument,
held that the requirement of the law cannot be used as an engine of fraud. It held further that even
though a particular format was prescribed for the transaction under the law, since the parties had
executed the transaction, it will be honoured and non-compliance will not vitiate the transaction.
Where the requirements of the law have not been complied with or where they have only been partially
complied with, the trust would not fail, rather a secret trust may result.

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Secret trusts
Secret trusts are made when the settlor enters an arrangement with an individual, that they will hold
property in trust for some beneficiaries to be disclosed either immediately or at a later time. These trusts
are called secret because, where made in a will, they don‘t disclose the fact of the trust on the face of the
will. Secret trusts may be fully secret or half secret.
Fully secret trusts
In a fully secret trust, there is no indication on the face of the will that the bequest or devise is meant for
anyone other than the stated donee. Thus, the gift appears beneficial on the face. It means that the trust is
not apparent and it seems like the testator is simply giving a gift in the will. Whereas, he would have had
an arrangement with the donee that the gift should be for some individual, whether disclosed or not.
However, there are two conditions for a trust to qualify here.
 The trustee must accept the trust and make a written promise in this regard
 The identity of the beneficiary(ies) must be disclosed to the trustee, before the death of the
testator.
See RE: BOYLES (1884) 26 Ch. D. 531, where the testator failed to communicate the identity of the
beneficiary to the trustee but the trustee later found an envelope amongst the testator‘s personal effects
(after his death) that named one Mr. Brown as the beneficiary. The Court held that finding the will in
that manner did not amount to communication and the secret trust must fail. However, delivery of a
sealed envelope with the names of the beneficiaries amounts to communication even if it was marked
―Do not open until after my death‖.
If either of the conditions is not satisfied, the trust fails and the donee takes absolutely. This means that
the intended trustee gets to enjoy the gift as if it was meant for him. The reason for this is that there is no
indication that a trust was intended or anticipated. So there is every reason to believe and hold that the
gift is meant for the named person.
Half secret trusts
Under this arrangement, the fact of a trust is disclosed on the face of the will. However, the identity of
the beneficiary is left undisclosed. Thus, there is partial disclosure of the fact of a trust. This is why it is
called a half-secret trust. Clearly, the gift is not beneficial on the face of the will and this fact materially
affects the outcome where the trust fails to operate.
Note that the conditions under fully secret trust will also apply fully here. In the case of BLACKWELL
v BLACKWELL, the testator made a will in which he bequeathed 12,000 pounds to five of his friends,
to hold on trust and apply to the purposes indicated by him to them, along with the power to pay 8,000
pounds of the sum to a person indicated by him. Before his death, the testator revealed the identity of the
beneficiary to one of the five friends. The court held that this was sufficient communication to allow the
trust operate.
Where the trust fails though, the donee cannot take absolutely. Rather, he will be required to hold the
gift in a resulting trust for the benefit of the testator‘s estate. This is because it is clear from the will that
the property was meant to be held in trust. As such, holding that the donee should take absolutely as in a
fully secret trust, would frustrate the otherwise clear intentions of the testator.

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Implied/ Resulting trusts
A creation of Equity, resulting trust operates on the presumed or anticipated intention of the settlor. It is
implied from the conduct of the parties (settlor, trustee, beneficiaries) and the surrounding circumstances
of the case.
It is usually resorted to by Equity in order to ensure that the settlor‘s intention to create the trust is not
frustrated by fatal non-compliance with established requirements for creating a trust. When it is implied,
the donee will hold the gift in trust for the estate of the settlor, and his next of kin by extension.
Thus, a resulting trust will operate where an express trust fails, where a surplus remains after the terms
of the trust have been performed or where a half secret trust fails.
Constructive trusts
This category of trusts is imposed by law, irrespective of the intention to create a trust. In this situation,
the court compels an individual to hold property for another in order to prevent them from escaping with
unconscionable conduct.
Public/Charitable And Private Trusts
This classification is based on the object to which the trust is meant to be used. There are just two
categories of trusts under this heading viz. public and private trusts.
Private trusts
When a trust is made with an individual or group of individuals as the object, such trust is private.
Examples of private trusts include trusts made in favour of wives, kids, family etc.
Public/charitable trusts
There is very little difference between a charitable and a public trust. While a charitable trust is always a
public trust, not all public trusts are charitable trusts. This is because, while the trust may be made for
the benefit of the public or a section, it may not qualify as a charitable trust as per the requirements
thereunder.
Charitable trusts are also made for the public good. There‘s no conclusive definition of what a charitable
trust is although, it can be recognized as having certain attributes viz.
 It is made for public benefit, either of the community or a good portion. Although, this is not a
strict requirement.
 The beneficiaries are not beneficiaries on the basis of their personal relationship with the settlor.
This would not apply to trusts for the relief of poverty though.
 It generally has no human objects or beneficiaries that can enforce. It is generally enforced by
the A.G. It may have human beneficiaries in certain cases, but they cannot enforce it.
How to determine a Charitable Trust
The general lack of a satisfactory definition often makes it difficult to determine if a trust is charitable or
not. However, the provisions of the Charitable Uses Act 1601, also referred to as the Statute of
Elizabeth, has always been used as a guide. The preamble to the Act particularly contained a catalogue
of objects regarded as charitable. Though now repealed, the preamble to the Act is saved by s. 13(2)
Mortmain and Charitable Uses Act, 1888 which classifies charitable uses as follows:

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The relief of the aged, impotent and poor people, the maintenance of sick and maimed soldiers and
mariners, schools of learning, free schools and scholars; the repair of bridges, ports, havens, causeways,
churches, sea-banks and highways; the education and preferment of orphans, the relief, stock or
maintenance for houses of correction; the marriage of the poor maids; the supportation, aid and the relief
or redemption of prisoners or captives; help of young tradesmen, handicraftsmen and persons decayed;
and the aid or ease of any poor inhabitants concerning payment of fifteens, setting out of soldiers and
other taxes.
It will be apparent that this classification has several problems. For one, the majority of the objects are
very outdated. They have no relevance in this day and age. Apart from this, the list obviously cannot be
exhaustive as it only contains examples of charitable uses and lays no general rule as to how charitable
uses can be determined or classified.
This shortcoming was repaired by Lord McNaughten in the case of COMMISSIONERS FOR SPECIAL
PURPOSES OF INCOME TAX v PEMSEL (1891) AC 531 when he reduced the classification of
charitable uses into the following:
 Trusts for the relief of poverty
Poverty is not necessarily destitution or unemployment. It can include gifts given to those in need or
indigent/people of limited means. Charitable trusts under this heading do not have to comply with the
rule of being for the benefit of the general public. Even if they are just for the benefit of a very small
group of individuals or on personal consideration/affiliation with the settlor, they can still qualify as the
alleviation of poverty, no matter how limited, does the public much benefit.
 Trusts for the advancement of religion
The religion must not be immoral or propagate foolish/unfounded ideas. There is no requirement as to
the type of religion the trust can benefit, so long as it is devoted to the promotion of spiritual teaching
and maintaining of doctrines in the religion. It must not be too narrow though. In the case of IYANDA
& ORS. v AJIKE & ANOR. (1948) 19 NLR 11, the testator made a devise of a room in his house to be
used as a mosque by his family. The court held that the room was intended to be used privately by the
testator‘s family and as such, did not constitute a charitable trust. Conversely, in the case of RE:
OBABUNMI PEDRO, where the trust was for the saying of masses for dead people, the court readily
held the trust to be charitable.
 Trusts for the advancement of education
Education here goes beyond formal teaching and learning. It extends to the promotion of arts and graces
of life. In the case of RE: DUPREE‘s DEED TRUST (1945) Ch. 16, the court upheld a trust for chess
playing among boys and youth. Other gifts like, educational trust funds, scholarships, public libraries
etc. will also be held charitable under this heading.
 Trusts for other purposes beneficial to the community
The essence of this category is to serve as a catch-all for trusts that cannot be expressly provided for
under the prior headings. The important requirement to be satisfied here is that the trust benefits the
community. They could include trusts that promote the mental and moral improvement of the
community. Under this heading, trusts for the welfare of cats and dogs have been held valid. See RE:
MOSS (1949) 1 Ch. D 495.
Generally, determining which of these headings a trust falls under and whether it is charitable can be a
trying job. The court is enjoined, in making its determination, to place little reliance on the settlor‘s

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opinion as to whether the trust is charitable or not and his motive in creating the trust. See PHILIPS v
PHILIPS (1967) 1 NLR 100.
As mentioned earlier, charitable trusts are enforced by the A.G, since they have no human objects
generally. Even if they do, it doesn‘t fall to the human objects to enforce it. a private individual can also
enforce a trust upon application to the A.G for a fiat. Advantages of charitable trusts
 The rule against perpetuities is inapplicable to charitable trusts. The rule is simply that interest in
a trust property cannot be suspended forever. It cannot continue to be held on trust for eternity.
Thus, there must come a time when the beneficiary will be conferred with both legal and
equitable interest in the trust and this must be within 21 years of the settlor‘s death. The rule will
not apply to charitable trusts though. This means that charitable trusts can continue for eternity,
if they last that long.
 It cannot be voided for lack of certainty of object
 It benefits a larger percentage of objects than private trusts
 The Cy-Pres doctrine is available to ensure that the trust is enforced. The general rule, when a
trust is ineffective or fails for whatever reason, is that it inures in a resulting trust to the estate of
the settlor. However, the exception is in cases of trusts that have a charitable intention. In this
instance, the trust property will be applied ‗cy-pres‘ to other charitable purposes as nearly as
possible to the original purpose of the trust. The doctrine will also be applied when an already
effective charitable trust becomes impracticable or impossible to perform i.e. due to change of
law, war etc.

Equitable Remedies
The whole of the development of equitable jurisdiction has hinged on the production of remedies. These
remedies, which were unavailable or inadequate at Common law were the hallmarks of the jurisdiction
of Courts of Chancery and are what gave them an ascendancy over the Common law courts.
By virtue of these remedies, and in consequence of the exclusive, concurrent and auxiliary jurisdiction
of the courts of Chancery, Equity was able to operate against the unfairness, arbitrariness, harshness,
inequality and injustice of the Common law.
Before the fusion of the jurisdictions of Courts of Equity and Common law by the Judicature Acts 1873-
75, these remedies were only available in the courts of Chancery. Now, they can be obtained in any
court as the two jurisdictions are exercisable through the same court. The remedies provided by Equity
include the following:
 Injunction
 Specific performance
 Delivery up and cancellation of documents
 Rectification
 Rescission
 Order for an account

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These remedies will be discussed seriatim. Before they are discussed though, it is important to recognize
that they are essentially in personam. They operate primarily against the conscience of the parties and as
such, may be said to have a wider reach than pure Common law damages.
Another thing of note is the fact that these remedies are purely discretionary. No applicant has a right to
demand these remedies from the court and whenever the court does award them, it is simply in exercise
of the jurisdiction of the court which must be judicious.
In a lot of cases, a primary consideration of the court in granting them is the unavailability or
undesirability of other remedies at Common law.
Injunction
An injunction is an order of the court directed to a party to a suit, and either ordering that he do some
thing or refrain from doing a particular thing. This was one of the earliest remedies provided by Courts
of Chancery. It was their signature remedy before they began to expand their jurisdiction. It was initially
called the Common Injunction.
Injunctions may be mandatory or prohibitory; interim, interlocutory or perpetual; Mareva; Anton Piller;
or Quia Timet.
Mandatory and Prohibitory Injunction
A mandatory injunction is an order of the court to a named party in a suit before it, compelling that
person to do some particular thing, as ordered by the court. Its essence is to compel the defendant to
restore things to the condition in which they were before he did the act complained of. It usually
mandates the doing of some positive act.
An example of a mandatory injunction is as follows:
―An Order… of this Honourable Court, mandating and compelling the defendant/respondent to return
the goods taken from the Plaintiff‘s house by force on the 21st of September 1999, pending…‖
A prohibitory injunction on the other hand is an order of the court to a named party in a suit before it,
restraining the person from doing some particular thing or disturbing the status quo. Evidently, it is best
for restricting the defendant from breaching the plaintiff‘s right.
An example of a prohibitory injunction is as follows:
―An Order… of this Honourable Court, prohibiting and restraining the defendant/respondent from
committing trespass or further acts of trespass on the large expanse of land, lying, situate and being at
No. 1 Tanke Iledu Street, Kwara, pending…‖
Historically, the courts have tended to favour prohibitory injunctions over mandatory injunctions. This
is because it is a lot easier to restrain a party from doing an act than it is to compel them to do anything.
This is especially since the courts were reluctant to grant a remedy that would require their supervision.
Besides, the balance of convenience often favours a prohibitory order. It is a lot easier to order that a
right should not be breached than it is to order that it should be unbreached. This distinction is not so
prominent in modern times though.

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Interim, Interlocutory and Perpetual Injunction
A perpetual injunction is usually given in consequence of final determination of the case between parties
before the court. Its effect is to finally settle the existing dispute between the parties and permanently
prevent the infringement of a right or compel the giving of a benefit.
A perpetual injunction may be mandatory or prohibitory. Once granted, it is a final judgment of the
court and can only be overturned on appeal. Its effect is to prevent multiplicity of suits and it brings an
end to the litigation.
Where an injunction is perpetual, it would end as follows:
―An Order of this Honourable Court, mandating and compelling/prohibiting and restraining the
defendant/respondent… in perpetuity‖
Interlocutory injunctions are usually made to secure a right of the applicant, the violation of which he
seeks to prevent, and in order to ensure that the subject matter of the dispute/right is maintained under
the status quo. It is granted to nullify an actual or anticipated alteration of the status quo or prevent the
taking of some step or doing of some act that would be impossible to reverse.
It is usually granted pending the full commencement of trial and the determination of the case between
the parties before the court. It may also be mandatory or prohibitory. Where an injunction is
interlocutory, it would usually end as follows:
―An Order of Interlocutory Injunction of this Honourable Court, mandating and compelling/prohibiting
and restraining the defendant/respondent… pending the determination of the substantive suit before this
court.‖
An interim injunction is granted as a matter of urgency. Often, an applicant for this injunction would
have to convince the court of the urgency of his application and this is usually done by swearing to an
affidavit of urgency. It is otherwise called an ex parte injunction and it is usually granted to preserve the
subject matter of the suit and maintain the status quo, pending the hearing of a motion on notice.
Due to the fact that it is heard and granted without notice to or arguments from the other party (because
of urgency), it is usually granted only for a short period of time, normally 14 days. It can also be
mandatory or prohibitory. Where an injunction is interim, it would usually end as follows:
―An Order of Interim Injunction of this Honourable Court, mandating and compelling/prohibiting and
restraining the defendant/respondent… pending the hearing of the motion on notice filed
contemporaneously before this court.‖
Differences between Interlocutory and Interim Injunctions
 An interlocutory injunction is usually related to a motion on notice while interim injunction is
related to motion ex parte
 Interlocutory requires notice to the defendant, interim does not require notice
 Interlocutory is usually granted during the pendency of the case. Interim is mostly granted at the
outset of the proceedings.
 Interlocutory lasts till the final determination of the suit while interim only lasts for a short
period, usually 14 days

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  The grant of an interlocutory injunction is usually the death of an interim injunction. This is
because the interim injunction ceases to exist on that day even if it is before 14 days.
 Interlocutory is used to maintain the status quo pending the determination of the substantive
case. Interim maintains the status quo until hearing of motion on notice.
 Interim is used for urgent situations. Interlocutory is not used for urgent situations.
Differences between Motion on Notice and Motion Ex Parte
 A motion on notice is linked to interlocutory injunction while a motion ex parte is linked to
interim injunction
 Motion on notice must be with notice to the defendant. Motion ex parte requires no such thing. It
is usually granted on the argument of one party, with neither notice nor arguments by the other.
 A motion ex parte is usually made and argued in the absence of the other party. Motion on notice
requires the presence of the other party.
 The address of the other party or his counsel must be stated at the bottom left corner of the
motion on notice. There is no need for this address on a motion ex parte.
 Motion ex parte is usually used for urgent situations. Motion on notice is not applicable for
urgent situations.
Mareva Injunction
This is a sort of injunction that operates to restrain a party to a suit before the court from either leaving
the jurisdiction of the court or removing his assets therefrom. It is granted, usually on an application by
the claimant, where it is clear that the defendant is taking preparatory measures to protect himself in the
event that he loses the case, with such measures intended to frustrate the execution of the likely
judgment against him. The injunction is usually prohibitory.
In AIC LTD. v NNPC (2005) LPELR 6 (SC), the Supreme Court per Edozie JSC held that mareva
injunction operates to stop a defendant against whom a plaintiff has a good, arguable claim, from
disposing of or dissipating his assets, pending the determination of the case or pending the payment of
the plaintiff (where judgment has been given but before enforcement).
The injunction would also operate in situations where the property of the plaintiff is in the possession of
any other person. It can be granted against that person.
Rhodes-Vivour JCA (as he then was), in INTERNATIONAL FINANCE CORPORATION v DSNL
OFFSHORE LTD. & ORS (2007) LPELR 5140 (CA), held that the following principles would govern
the grant of a mareva injunction:
 There must be a justifiable cause of action against the defendant
 There must be a real and imminent risk of the defendant removing his assets from the court‘s
jurisdiction and thereby rendering nugatory, any judgment which the applicant may obtain
 The applicant must make a full disclosure of all material facts relevant to the application
 The applicant must give full particulars of the assets within the jurisdiction of the court
 The balance of convenience must be on the side of the applicant
 The applicant must be prepared to give an undertaking as to damages.

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Anton Piller Injunction
An anton piller injunction is also interlocutory in nature. It was laid down in the case of ANTON-
PILLER KG v MANUFACTURING PROCESSES LTD. (1976) 1 Ch. 55 CA. In that case, the action
was for infringement of certain registered trademarks by the defendants. The plaintiffs were however
unable to prove their claim sufficiently with the documents they possessed. They thus sought an order ex
parte, to compel the defendants to allow the plaintiff‘s counsel to inspect the matters in issue and show
them on oath. Their argument was that if the defendants were given notice of the application, relevant
evidence would miraculously disappear. The court heard the application ex parte and in camera.
Evidently, the anton piller injunction is a procedural remedy that allows the delivery up and inspection
of documents during trial. It is quite similar to Discovery and operates on the auxiliary jurisdiction of
Equity. The injunction is largely mandatory in nature as it compels the doing of a thing. In the ANTON-
PILLER case, Omrad LJ held that the injunction can only be granted where it would be in the interest of
justice. He further laid down the conditions for its grant thus:
 There must be an extremely strong prima facie case
 The damage, potential or actual, for the applicant must be serious
 There must be clear evidence that the defendants have, in their possession, incriminating
documents or things
 That there is a real probability that they may destroy such material before the application inter
partes can be made or heard.

Quia Timet Injunction

This injunction is usually sought by a person for the purpose of restraining the doing of an apprehended
mischief. It is granted contrary to the general rule that injunctions are not granted when a breach of a
right is only a prospect. The grant of this injunction is predicated on the recognition of the right of a
person to take action before he is actually injured.
The court is slow to grant such injunctions though. This is especially due to the drastic effect of the
injunction on the respondent. The applicant must establish clear and convincing evidence that
irreparable injury is probable or that injury will surely follow if the apprehended act is not restrained.
The quia timet injunction may be mandatory or prohibitory, interim or interlocutory.

Conditions for the grant of an injunction

In the case of ADELEKE & ORS. v LAWAL & ORS. (2013) LPELR 20090 (SC), the Supreme Court
laid down the conditions that must be satisfied by an applicant that seeks the grant of an injunction.
They are:
 There must be a subsisting right
 The subsisting action must clearly donate a legal right which the applicant must protect
 The applicant must show that there is a serious question or substantial issue to be tried
 The applicant must show that because of (3) above, the status quo should be maintained, pending
the determination of the substantive action or motion on notice

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  The applicant must show that the balance of convenience in granting the application is in his
favour
 The applicant must show that damages cannot be adequate compensation for the injury he wants
the court to protect him from
 The applicant must make an undertaking to pay damages in the event of a wrongful exercise of
the court‘s discretion in granting the application.

Specific Performance
This remedy is particularly important in the realm of contracts. It is one of the signature remedies that
show the remedial justice sought to be provided by Equity. While there is no recognition of a party‘s
right, either in Common law or Equity, to break his contractual obligations, the law generally does not
deny that a party can.
This is because contracts are regarded as personal covenants and the law was slow to dabble into the
obligation voluntarily undertaken by a party. As such, the best the Common law courts could do was
award damages when such breach occurs.
However, Courts of Equity, in their mission to do substantial justice, refused to let well enough alone.
They considered such an abstention by the court to be inadequate for the purposes of justice and on the
basis that such repudiation would constitute a violation of moral and equitable duties, the court would, in
certain circumstances, bind a party to the strict performance of his obligations under the contract. This,
in essence, is the remedy of specific performance.
It is an order of the court, calling for the rendering, as nearly as practicable, a promised performance
under a contract. The performance may be in respect of a legal or contractual duty and the order is
usually granted where monetary damages would be inappropriate or inadequate.
This would especially be the case where the contract concerns real estate or some rare article or where
the situation is such that irreparable loss would occur from the repudiation. In essence, specific
performance is an order of the court that compels a party to specifically fulfill his obligations in
accordance with the terms of the contract.
The order is pretty much a mandatory injunction. While it may be granted to restrain a party from
repudiating his obligations under the contract, its effect would still be essentially mandatory. There are
conditions that guide the grant of specific performance. These are:
 Common law remedies must be inadequate i.e. damages  The grant of the remedy is
discretionary.
 The court will only grant where it is satisfied that it will not be acting in vain, especially in
instances of contracts that would require the supervision of the court.

Circumstances when the court will grant Specific Performance

There are circumstances in which the court has granted the remedy of specific performance. If it is faced
with these instances, it is more than likely to grant them again, all things being equal.

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  Contracts that involve building or construction, specifically where the work to be done is clearly
defined, the plaintiff has an interest in the execution and damages would be inadequate.
 Contracts of sale of land. The court would still grant even if payment was agreed to be in
instalments. This is in view of the scarcity and unique nature of land.
 An award of an arbitrator. This is especially where it made for the doing of a certain thing. The
order will not be granted where the award is monetary.
 Separation deeds. This would be in respect of unfulfilled terms in the deed and would be granted
especially where the deed is futuristic. See WILSON v WILSON (1848) 1 HLC 538 where it
was held that an agreement which regulates the rights of parties to a marriage whose separation
is pending or inevitable, is not contrary to public policy and can be specifically enforced.
 Contracts for the transfer of chattel, especially where damages would be insufficient. This would
certainly be the case where the chattel is quite unique or has special value to the purchaser. See s.
52 SOGA which particularly provides for this remedy.

Circumstances when the court will not grant Specific Performance

The court would be reluctant to grant the remedy of specific performance in the following
circumstances:
 Entirely oral contracts (absence of writing). See s. 4 Statute of Frauds.
 Where the transaction is incomplete. The contract must be complete as regards all the elements
of a valid contract.
 Where the doctrine of mutuality is involved. This doctrine simply states that if the contract is
unenforceable against one party by virtue of some legal incapacity or other reason, it should be
unenforceable by that party against the other i.e. where it involves an infant. The court would be
wary of granting specific performance against or for an infant.
 Where such grant would involve supervision of the court. This is undesirable as the court is loath
to command continuance of a relationship that is against the will of the parties.
 Where consideration for the contract on the part of the applicant is nonexistent or where the
contract is fraught with illegality or fraud
 Where misrepresentation is occasioned in the transaction especially on the part of the applicant
 Where performance would be impossible
 Where the defendant would suffer hardship
 Where there is defective title i.e. nemo dat quod non habet. The purchaser may be entitled to
repudiate instead.
 Where the transaction lacks transparency or fairness i.e. he who seeks equity must do equity
 Where the applicant is culpable for delay or laches

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Delivery Up & Cancellation
This remedy is in respect of documents which are avoidable that have been avoided by the applicant.
The remedy is meant to prevent an improper or injurious use of a document which, on the face of it, is
valid but is latently void or voidable. The delivery up and cancellation of the documents is used to
forestall a situation where the documents, should they remain in the possession of the defendant, may be
used to found claims and deceive third parties.
The document that is subject of the remedy must be void or voidable. However, the defect must not be
apparent on the face of the document. If it is so, there would be no need for the remedy and as such, it
would not be granted. The applicant would be entitled to the relief where he can prove fraud, actual or
constructive, or misrepresentation or if he can show that it would be inequitable to let the
document/transaction stand.
Where the document is not void or voidable or if there is a good argument that may be made in favour of
the document, the relief will not be granted. In the same vein, no relief will be granted where the defect
is apparent as the inherent danger sought to be avoided would have become otiose.
The proposition that documents purporting to alienate family property can be delivered up and cancelled
was given judicial blessing in the cases of ADAGUN v FAGBOLA and EJILEMELE v OPARA. In
ADAGUN v FAGBOLA, the court had no trouble with cancelling a document that purported to
mortgage allotted family land to the defendant.
Rescission
This remedy occurs in relation to contracts that are voidable. The effect of such contracts is that they are
valid until set aside. Such contract may be set aside via rescission. It is a right and corresponding remedy
accruing to the party that is entitled to set aside the contract.
The right is exercised where a party to a contract expresses by word or act in an unequivocal manner,
that he is no longer willing or that he refuses to be bound by the contract. That course of conduct or
action, if justified by the circumstances or by the facts of the case, puts an end to the contract and
restores the parties as between them, to the position in which they were before the contract was entered
into. The full effect of rescission, therefore, is to treat the contract as though it had never been entered
into.
The full effect of a rescission is to treat the contract as if it was never entered into. As such, a decision to
utilize the remedy impairs the right of the applicant to require damages for any wrong occasioned to him
under the contract.
The grounds for rescission include unilateral and common mistake, fraudulent and innocent
misrepresentation, non-disclosure of material facts (where there is a contractual and moral duty as in
contracts uberrimae fidei), constructive fraud (undue influence for instance), misdescription of material
facts and a contractual agreement to rescind.
The right to rescind may be lost where the applicant affirms the contract or is culpable of acquiescence,
restitution in integrum is impossible, the contract has been completed and where rights under the
contract have been acquired by third parties.

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Rectification
This remedy often arises in cases of variance between the agreed intention of the parties to a transaction
and the document or instrument that is intended to give expression to the agreed intention. The remedy
would be ordered in order to bring the document or instrument in conformity with the true and agreed
intention of the parties to the transaction.
Thus rectification is an equitable remedy that helps correct an error in a written instrument so as to make
it conform with the previously agreed intention of the parties. The remedy is essentially granted in the
event of a common mistake between the parties.
For a remedy of rectification to be granted, there must be a finally concluded contract between the
parties, common mistake, continuing intention of the parties up to the point of execution when the
mistake was discovered, the mistake must not be of law.
The remedy will be refused where the contract is no more capable of performance. This is because
equity does not act in vain. It may also be refused if there is another means of giving effect to the
intention of the parties. Finally, it will be refused where the contract is fully and wholly performed such
that nothing remains to be done under the contract.
The whole of the development of equitable jurisdiction has hinged on the production of remedies. These
remedies, which were unavailable or inadequate at Common law were the hallmarks of the jurisdiction
of Courts of Chancery and are what gave them an ascendancy over the Common law courts.
By virtue of these remedies, and in consequence of the exclusive, concurrent and auxiliary jurisdiction
of the courts of Chancery, Equity was able to operate against the unfairness, arbitrariness, harshness,
inequality and injustice of the Common law.
Before the fusion of the jurisdictions of Courts of Equity and Common law by the Judicature Acts 1873-
75, these remedies were only available in the courts of Chancery. Now, they can be obtained in any
court as the two jurisdictions are exercisable through the same court. The remedies provided by Equity
include the following:
 Injunction
 Specific performance
 Delivery up and cancellation of documents
 Rectification
 Rescission
 Order for an account
These remedies will be discussed seriatim. Before they are discussed though, it is important to recognize
that they are essentially in personam. They operate primarily against the conscience of the parties and as
such, may be said to have a wider reach than pure Common law damages.
Another thing of note is the fact that these remedies are purely discretionary. No applicant has a right to
demand these remedies from the court and whenever the court does award them, it is simply in exercise
of the jurisdiction of the court which must be judicious.
In a lot of cases, a primary consideration of the court in granting them is the unavailability or
undesirability of other remedies at Common law.

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Injunction
An injunction is an order of the court directed to a party to a suit, and either ordering that he do some
thing or refrain from doing a particular thing. This was one of the earliest remedies provided by Courts
of Chancery. It was their signature remedy before they began to expand their jurisdiction. It was initially
called the Common Injunction.
Injunctions may be mandatory or prohibitory; interim, interlocutory or perpetual; Mareva; Anton Piller;
or Quia Timet.

Mandatory and Prohibitory Injunction

A mandatory injunction is an order of the court to a named party in a suit before it, compelling that
person to do some particular thing, as ordered by the court. Its essence is to compel the defendant to
restore things to the condition in which they were before he did the act complained of. It usually
mandates the doing of some positive act.
An example of a mandatory injunction is as follows:
―An Order… of this Honourable Court, mandating and compelling the defendant/respondent to return
the goods taken from the Plaintiff‘s house by force on the 21st of September 1999, pending…‖
A prohibitory injunction on the other hand is an order of the court to a named party in a suit before it,
restraining the person from doing some particular thing or disturbing the status quo. Evidently, it is best
for restricting the defendant from breaching the plaintiff‘s right.
An example of a prohibitory injunction is as follows:
―An Order… of this Honourable Court, prohibiting and restraining the defendant/respondent from
committing trespass or further acts of trespass on the large expanse of land, lying, situate and being at
No. 1 Tanke Iledu Street, Kwara, pending…‖
Historically, the courts have tended to favour prohibitory injunctions over mandatory injunctions. This
is because it is a lot easier to restrain a party from doing an act than it is to compel them to do anything.
This is especially since the courts were reluctant to grant a remedy that would require their supervision.
Besides, the balance of convenience often favours a prohibitory order. It is a lot easier to order that a
right should not be breached than it is to order that it should be unbreached. This distinction is not so
prominent in modern times though.

Interim, Interlocutory and Perpetual Injunction

A perpetual injunction is usually given in consequence of final determination of the case between parties
before the court. Its effect is to finally settle the existing dispute between the parties and permanently
prevent the infringement of a right or compel the giving of a benefit.
A perpetual injunction may be mandatory or prohibitory. Once granted, it is a final judgment of the
court and can only be overturned on appeal. Its effect is to prevent multiplicity of suits and it brings an
end to the litigation.

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Where an injunction is perpetual, it would end as follows:
―An Order of this Honourable Court, mandating and compelling/prohibiting and restraining the
defendant/respondent… in perpetuity‖
Interlocutory injunctions are usually made to secure a right of the applicant, the violation of which he
seeks to prevent, and in order to ensure that the subject matter of the dispute/right is maintained under
the status quo. It is granted to nullify an actual or anticipated alteration of the status quo or prevent the
taking of some step or doing of some act that would be impossible to reverse.
It is usually granted pending the full commencement of trial and the determination of the case between
the parties before the court. It may also be mandatory or prohibitory. Where an injunction is
interlocutory, it would usually end as follows:
―An Order of Interlocutory Injunction of this Honourable Court, mandating and compelling/prohibiting
and restraining the defendant/respondent… pending the determination of the substantive suit before this
court.‖
An interim injunction is granted as a matter of urgency. Often, an applicant for this injunction would
have to convince the court of the urgency of his application and this is usually done by swearing to an
affidavit of urgency. It is otherwise called an ex parte injunction and it is usually granted to preserve the
subject matter of the suit and maintain the status quo, pending the hearing of a motion on notice.
Due to the fact that it is heard and granted without notice to or arguments from the other party (because
of urgency), it is usually granted only for a short period of time, normally 14 days. It can also be
mandatory or prohibitory. Where an injunction is interim, it would usually end as follows:
―An Order of Interim Injunction of this Honourable Court, mandating and compelling/prohibiting and
restraining the defendant/respondent… pending the hearing of the motion on notice filed
contemporaneously before this court.‖

Differences between Interlocutory and Interim Injunctions

 An interlocutory injunction is usually related to a motion on notice while interim injunction is
related to motion ex parte
 Interlocutory requires notice to the defendant, interim does not require notice
 Interlocutory is usually granted during the pendency of the case. Interim is mostly granted at the
outset of the proceedings.
 Interlocutory lasts till the final determination of the suit while interim only lasts for a short
period, usually 14 days
 The grant of an interlocutory injunction is usually the death of an interim injunction. This is
because the interim injunction ceases to exist on that day even if it is before 14 days.
 Interlocutory is used to maintain the status quo pending the determination of the substantive
case. Interim maintains the status quo until hearing of motion on notice.
 Interim is used for urgent situations. Interlocutory is not used for urgent situations.

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Differences between Motion on Notice and Motion Ex Parte
 A motion on notice is linked to interlocutory injunction while a motion ex parte is linked to
interim injunction
 Motion on notice must be with notice to the defendant. Motion ex parte requires no such thing. It
is usually granted on the argument of one party, with neither notice nor arguments by the other.
 A motion ex parte is usually made and argued in the absence of the other party. Motion on notice
requires the presence of the other party.
 The address of the other party or his counsel must be stated at the bottom left corner of the
motion on notice. There is no need for this address on a motion ex parte.
 Motion ex parte is usually used for urgent situations. Motion on notice is not applicable for
urgent situations.

Mareva Injunction
This is a sort of injunction that operates to restrain a party to a suit before the court from either leaving
the jurisdiction of the court or removing his assets therefrom. It is granted, usually on an application by
the claimant, where it is clear that the defendant is taking preparatory measures to protect himself in the
event that he loses the case, with such measures intended to frustrate the execution of the likely
judgment against him. The injunction is usually prohibitory.
In AIC LTD. v NNPC (2005) LPELR 6 (SC), the Supreme Court per Edozie JSC held that mareva
injunction operates to stop a defendant against whom a plaintiff has a good, arguable claim, from
disposing of or dissipating his assets, pending the determination of the case or pending the payment of
the plaintiff (where judgment has been given but before enforcement).
The injunction would also operate in situations where the property of the plaintiff is in the possession of
any other person. It can be granted against that person.
Rhodes-Vivour JCA (as he then was), in INTERNATIONAL FINANCE CORPORATION v DSNL
OFFSHORE LTD. & ORS (2007) LPELR 5140 (CA), held that the following principles would govern
the grant of a mareva injunction:
 There must be a justifiable cause of action against the defendant
 There must be a real and imminent risk of the defendant removing his assets from the court‘s
jurisdiction and thereby rendering nugatory, any judgment which the applicant may obtain
 The applicant must make a full disclosure of all material facts relevant to the application
 The applicant must give full particulars of the assets within the jurisdiction of the court
 The balance of convenience must be on the side of the applicant
 The applicant must be prepared to give an undertaking as to damages.

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Anton Piller Injunction
An anton piller injunction is also interlocutory in nature. It was laid down in the case of ANTON-
PILLER KG v MANUFACTURING PROCESSES LTD. (1976) 1 Ch. 55 CA. In that case, the action
was for infringement of certain registered trademarks by the defendants. The plaintiffs were however
unable to prove their claim sufficiently with the documents they possessed. They thus sought an order ex
parte, to compel the defendants to allow the plaintiff‘s counsel to inspect the matters in issue and show
them on oath. Their argument was that if the defendants were given notice of the application, relevant
evidence would miraculously disappear. The court heard the application ex parte and in camera.
Evidently, the anton piller injunction is a procedural remedy that allows the delivery up and inspection
of documents during trial. It is quite similar to Discovery and operates on the auxiliary jurisdiction of
Equity. The injunction is largely mandatory in nature as it compels the doing of a thing. In the ANTON-
PILLER case, Omrad LJ held that the injunction can only be granted where it would be in the interest of
justice. He further laid down the conditions for its grant thus:
 There must be an extremely strong prima facie case
 The damage, potential or actual, for the applicant must be serious
 There must be clear evidence that the defendants have, in their possession, incriminating
documents or things
 That there is a real probability that they may destroy such material before the application inter
partes can be made or heard.

Quia Timet Injunction

This injunction is usually sought by a person for the purpose of restraining the doing of an apprehended
mischief. It is granted contrary to the general rule that injunctions are not granted when a breach of a
right is only a prospect. The grant of this injunction is predicated on the recognition of the right of a
person to take action before he is actually injured.
The court is slow to grant such injunctions though. This is especially due to the drastic effect of the
injunction on the respondent. The applicant must establish clear and convincing evidence that
irreparable injury is probable or that injury will surely follow if the apprehended act is not restrained.
The quia timet injunction may be mandatory or prohibitory, interim or interlocutory.

Conditions for the grant of an injunction

In the case of ADELEKE & ORS. v LAWAL & ORS. (2013) LPELR 20090 (SC), the Supreme Court
laid down the conditions that must be satisfied by an applicant that seeks the grant of an injunction.
They are:
 There must be a subsisting right
 The subsisting action must clearly donate a legal right which the applicant must protect

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  The applicant must show that there is a serious question or substantial issue to be tried
 The applicant must show that because of (3) above, the status quo should be maintained, pending
the determination of the substantive action or motion on notice
 The applicant must show that the balance of convenience in granting the application is in his
favour
 The applicant must show that damages cannot be adequate compensation for the injury he wants
the court to protect him from
 The applicant must make an undertaking to pay damages in the event of a wrongful exercise of
the court‘s discretion in granting the application.
Specific Performance
This remedy is particularly important in the realm of contracts. It is one of the signature remedies that
show the remedial justice sought to be provided by Equity. While there is no recognition of a party‘s
right, either in Common law or Equity, to break his contractual obligations, the law generally does not
deny that a party can.
This is because contracts are regarded as personal covenants and the law was slow to dabble into the
obligation voluntarily undertaken by a party. As such, the best the Common law courts could do was
award damages when such breach occurs.
However, Courts of Equity, in their mission to do substantial justice, refused to let well enough alone.
They considered such an abstention by the court to be inadequate for the purposes of justice and on the
basis that such repudiation would constitute a violation of moral and equitable duties, the court would, in
certain circumstances, bind a party to the strict performance of his obligations under the contract. This,
in essence, is the remedy of specific performance.
It is an order of the court, calling for the rendering, as nearly as practicable, a promised performance
under a contract. The performance may be in respect of a legal or contractual duty and the order is
usually granted where monetary damages would be inappropriate or inadequate.
This would especially be the case where the contract concerns real estate or some rare article or where
the situation is such that irreparable loss would occur from the repudiation. In essence, specific
performance is an order of the court that compels a party to specifically fulfill his obligations in
accordance with the terms of the contract.
The order is pretty much a mandatory injunction. While it may be granted to restrain a party from
repudiating his obligations under the contract, its effect would still be essentially mandatory. There are
conditions that guide the grant of specific performance. These are:
 Common law remedies must be inadequate i.e. damages.
 The grant of the remedy is discretionary.
 The court will only grant where it is satisfied that it will not be acting in vain, especially in
instances of contracts that would require the supervision of the court.

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Circumstances when the court will grant Specific Performance
There are circumstances in which the court has granted the remedy of specific performance. If it is faced
with these instances, it is more than likely to grant them again, all things being equal.
 Contracts that involve building or construction, specifically where the work to be done is clearly
defined, the plaintiff has an interest in the execution and damages would be inadequate.
 Contracts of sale of land. The court would still grant even if payment was agreed to be in
instalments. This is in view of the scarcity and unique nature of land.
 An award of an arbitrator. This is especially where it made for the doing of a certain thing. The
order will not be granted where the award is monetary.
 Separation deeds. This would be in respect of unfulfilled terms in the deed and would be granted
especially where the deed is futuristic. See WILSON v WILSON (1848) 1 HLC 538 where it
was held that an agreement which regulates the rights of parties to a marriage whose separation
is pending or inevitable, is not contrary to public policy and can be specifically enforced.
 Contracts for the transfer of chattel, especially where damages would be insufficient. This would
certainly be the case where the chattel is quite unique or has special value to the purchaser. See s.
52 SOGA which particularly provides for this remedy.
Circumstances when the court will not grant Specific Performance
The court would be reluctant to grant the remedy of specific performance in the following
circumstances:
 Entirely oral contracts (absence of writing). See s. 4 Statute of Frauds.
 Where the transaction is incomplete. The contract must be complete as regards all the elements
of a valid contract.
 Where the doctrine of mutuality is involved. This doctrine simply states that if the contract is
unenforceable against one party by virtue of some legal incapacity or other reason, it should be
unenforceable by that party against the other i.e. where it involves an infant. The court would be
wary of granting specific performance against or for an infant.
 Where such grant would involve supervision of the court. This is undesirable as the court is loath
to command continuance of a relationship that is against the will of the parties.
 Where consideration for the contract on the part of the applicant is nonexistent or where the
contract is fraught with illegality or fraud
 Where misrepresentation is occasioned in the transaction especially on the part of the applicant
 Where performance would be impossible
 Where the defendant would suffer hardship
 Where there is defective title i.e. nemo dat quod non habet. The purchaser may be entitled to
repudiate instead.
 Where the transaction lacks transparency or fairness i.e. he who seeks equity must do equity
 Where the applicant is culpable for delay or laches

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Delivery Up & Cancellation
This remedy is in respect of documents which are avoidable that have been avoided by the applicant.
The remedy is meant to prevent an improper or injurious use of a document which, on the face of it, is
valid but is latently void or voidable. The delivery up and cancellation of the documents is used to
forestall a situation where the documents, should they remain in the possession of the defendant, may be
used to found claims and deceive third parties.
The document that is subject of the remedy must be void or voidable. However, the defect must not be
apparent on the face of the document. If it is so, there would be no need for the remedy and as such, it
would not be granted. The applicant would be entitled to the relief where he can prove fraud, actual or
constructive, or misrepresentation or if he can show that it would be inequitable to let the
document/transaction stand.
Where the document is not void or voidable or if there is a good argument that may be made in favour of
the document, the relief will not be granted. In the same vein, no relief will be granted where the defect
is apparent as the inherent danger sought to be avoided would have become otiose.
The proposition that documents purporting to alienate family property can be delivered up and cancelled
was given judicial blessing in the cases of ADAGUN v FAGBOLA and EJILEMELE v OPARA. In
ADAGUN v FAGBOLA, the court had no trouble with canceling a document that purported to
mortgage allotted family land to the defendant.
Rescission
This remedy occurs in relation to contracts that are voidable. The effect of such contracts is that they are
valid until set aside. Such contract may be set aside via rescission. It is a right and corresponding remedy
accruing to the party that is entitled to set aside the contract.
The right is exercised where a party to a contract expresses by word or act in an unequivocal manner,
that he is no longer willing or that he refuses to be bound by the contract. That course of conduct or
action, if justified by the circumstances or by the facts of the case, puts an end to the contract and
restores the parties as between them, to the position in which they were before the contract was entered
into. The full effect of rescission, therefore, is to treat the contract as though it had never been entered
into.
The full effect of a rescission is to treat the contract as if it was never entered into. As such, a decision to
utilize the remedy impairs the right of the applicant to require damages for any wrong occasioned to him
under the contract.
The grounds for rescission include unilateral and common mistake, fraudulent and innocent
misrepresentation, non-disclosure of material facts (where there is a contractual and moral duty as in
contracts uberrimae fidei), constructive fraud (undue influence for instance), misdescription of material
facts and a contractual agreement to rescind.
The right to rescind may be lost where the applicant affirms the contract or is culpable of acquiescence,
restitution in integrum is impossible, the contract has been completed and where rights under the
contract have been acquired by third parties.

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Rectification
This remedy often arises in cases of variance between the agreed intention of the parties to a transaction
and the document or instrument that is intended to give expression to the agreed intention. The remedy
would be ordered in order to bring the document or instrument in conformity with the true and agreed
intention of the parties to the transaction.
Thus rectification is an equitable remedy that helps correct an error in a written instrument so as to make
it conform with the previously agreed intention of the parties. The remedy is essentially granted in the
event of a common mistake between the parties.
For a remedy of rectification to be granted, there must be a finally concluded contract between the
parties, common mistake, continuing intention of the parties up to the point of execution when the
mistake was discovered, the mistake must not be of law.
The remedy will be refused where the contract is no more capable of performance. This is because
equity does not act in vain. It may also be refused if there is another means of giving effect to the
intention of the parties. Finally, it will be refused where the contract is fully and wholly performed such
that nothing remains to be done under the contract.

Assignment Of Choses In Action

Property generally may be realty (real) or personality (personal). Realty are characterized by
geographical fixity (land) while personality are generally mobile.
Personality is also classified into tangible/corporeal and intangible/incorporeal. The former is capable of
physical handling/possession/manipulation/enjoyment while the latter is incapable of any of these.
Incorporeal property is also called a chose in action which has been defined as a legal expression used to
describe all personal rights of property which can only be claimed or enforced by action (in a court) and
not by taking physical possession.
A chose generally is a thing capable of being owned. Choses in action may be legal or equitable. Legal
choses in action are rights which were enforceable or recoverable only by an action at Common law.
This category of choses includes debts, benefits under a contract, insurance policies, copyrights, patents
etc.
Equitable choses on the other hand are rights over property which were only
enforceable/recoverable/cognizable by the courts of Chancery. It could only be recovered by a suit in
Equity and the rights under this category include interests of a beneficiary in a Trust, a
legacy/reversionary interest under a will etc.
Choses in action may also be in respect of already existing things/property or things/property to be
acquired at a future date but which are not yet in possession. The chose in action may be property in
itself and it may also be a propriety right over property.
Assignment
Assignment is the transfer of something from one person to another such that the assignee obtains rights
of a nature that were hitherto exercisable only by the assignor. An assignment of a chose is thus the
transfer of a chose in action from the assignor to the assignee such that the assignee obtains and becomes
entitled to enjoy rights in respect of that chose, which were hitherto exclusively enjoyed by the assignor.

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Assignment may be legal (statutory) or equitable.
Assignment and Novation
An assignment is quite distinct from a novation. Novation is essentially a legal device by which parties
to a contract may legally vary/shift their obligations under the contract to third parties. Thus, A can
agree with B, his creditor, that C, who owes him money, will pay that debt to B in full satisfaction of his
own (A‘s) debt.
Novation is however fundamentally different from assignment in three material aspects:
 The consent of the parties is sine qua non since the original contract is rescinded by the novation.
There must thus be consensus ad idem. There can be no novation otherwise. This is contrary to
the case in assignment where there only need be communication to the assignee, his consent and
that of the trustee of the liability are immaterial.
 The original debt in novation must be totally extinguished under the new arrangement.
There is no such requirement for assignment to be valid.
 For novation to be valid, there must be consideration in all cases as it is essentially a new
contract. The requirement for consideration in assignment is much more relaxed.

Assignment and Equities

The general rule as regards assignment of choses in action is that an assignee takes, subject to the
equities thar already apply to the chose in action (property) in question. Thus, anyone who has an
interest (legal or equitable) in an assigned chose is entitled to a higher priority than that of the assignee.
The logic here is based on a recognition that the assignee cannot acquire a better title than that of the
assignor. What he essentially gains by virtue of the assignment is a right to continue in the stead of the
assignor in respect of that chose and nothing better.
In Re Knapman (1881) 18 Ch. D 300 the beneficiaries of a will brought an action against the executor
seeking to revoke the probate. While the matter was in court, these beneficiaries assigned the right under
the will to someone else.
Their action subsequently failed in court, the court ruled that the executor had a right to set off the costs
of the suit against the estate. As such, since the right to this had already been assigned, the assignee has
to settle this cost since he was assigned a property that had a pre-existing liability.
Claims of equities that arise after notice of the assignment has been given to the trustee would not affect
the assignee however, except where the claim is very closely related to the original transaction upon
which the chose came into existence.
The rule that the assignee takes subject to equities will not apply where the trustee is estopped, either by
conduct or deed, from setting up equities against the assignee. It would not also apply where the
agreement occasioning the original transaction includes a clause that the assignees of the assignor would
take free from all equities.

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History
Historically, assignment of choses in action was largely unrecognized at Common law. There was the
fear that allowing such assignment would bring about Maintenance and even cases of Champerty as well
as the risk of encouraging a litany of contentious matters on the same res.
Maintenance arises where a person who has no legal interest in a matter provides assistance by money or
otherwise to a party to the suit while Champerty marries the foregoing with the prospect of reward out of
the possible spoils of the suit.
Thus, no debt could be assigned at Common law unless the debtor specifically agreed to the assignment.
The only exceptions allowed by Common law were in respect of choses in action assigned by or to the
King and assignment of negotiable instruments in order to promote trade.
Equity has however always recognized the assignment of choses in action, both equitable and legal. It
would not however allow the assignment of bare rights without accompanying interest in property. This
was to avoid, as in the case of the Common law, situations that encourage Maintenance.

Assignability
Not all choses in action are assignable. The courts would not give effect to such assignments either on
grounds of public policy or on account of the nature of the subject matter of the assignment.
Choses in action that are not assignable include:
 Salaries of public officials. This is because it is perceived that if allowed to assign their salaries,
they may deprive themselves of their means of sustenance and thereby impair the efficiency
which is most desirable for the public service.
 Alimony is not assignable on much the same grounds as salaries of public officials as the money
is meant for the maintenance of the spouse.
 Rights arising out of a contract of a personal nature i.e. contracts that require personal service
like employment.
 Expectancies (future choses) are not assignable at Common law based on the maxim: Nemo dat
quod non habet. They are assignable in Equity although, such assignment must be for value.

Equitable Assignment
An equitable assignment is of a flexible nature. This flexibility makes it quite distinct from legal
assignments as they do not require all of the formality required under the law. It may be in respect of a
legal or equitable chose. Thus, there may be an equitable assignment of an equitable chose or an
equitable assignment of a legal chose.
Validity
While there is no strict formality required for equitable assignments, certain criteria are instructive as to
whether it would be considered valid or not.
For an equitable assignment to be considered as having been effected, there must be a clear intent to
assign. While Equity does not require that the assignment be in writing or made in any particular format,
there must be a clearly deducible intent to assign on the part of the assignor.

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The intent to assign here will be construed from the words used and the particular circumstances of the
case. If what is construed is a mere mandate/authority to hold onto certain property, no intent to assign
may be ascribed by the court.
The position that Equity does not require writing for equitable assignments has however been affected
by S. 9 of the Statute of Frauds and S. 78(1)(c) of the Property and Conveyancing Law which
require that the assignment of any equitable interest or trust must be in writing.
The assignment is also required to be communicated to the assignee. Although, the assignee may still
take in certain instances even without communication, subject to the right of the assignee to repudiate
the transfer when he becomes aware of it.
The particular chose intended to be assigned must be identified. It is insufficient to give a vague
representation of what is sought to be assigned. Such vagueness may impair the court‘s construction of
an intent to assign in such circumstance.
Consideration in equitable assignment depends on the circumstance. Where the assignment is complete
in the sense that there is nothing left for the assignor to do to perfect the assignee‘s title, there would be
no need for consideration.
If it is incomplete though, consideration may be required. Consideration will also be required where the
assignment concerns some future chose as the agreement in such instance can only be a contract to
assign and all contracts must be backed by consideration.
No consideration is however required for assignment of existing choses.
There is no real requirement for notice of the equitable assignment to be given to the trustee of the
liability. Notice is however useful to the extent that it puts the trustee on guard as to the change of rights
affecting the chose and may prevent him from settling in favour of the assignor instead of the assignee.
It also makes the trustee liable to the assignee where he settles in favour of the assignor in spite of the
notice given to him. Again, while the assignee generally takes subject to any prior equities affecting the
chose, giving notice ensures that he would not be affected by any subsequent equities.
Most importantly, notice allows the assignee to establish the priority of his interest in consequence of
the rule in DEARLE v HALL.
Effect
An equitable assignment of a chose in action has bearing on the manner in which the rights can be
enforced in a court of law. The effect here is largely dependent on whether the chose in question is a
legal or equitable chose and if the chose was absolutely assigned or not.
Where the assignment concerns a legal chose, the assignee cannot assert his title over the property in his
own name. He must join the name of the assignor either as co-plaintiff, where he agrees, or as a
defendant. Where the chose is equitable though, the assignee can sue in his own name.
An assignment is absolute when the assignor transfers his whole interest in the chose to the assignee. It
is however non-absolute where it is made subject to some condition at the happening of which it would
become inoperable or where only a charge is made on the chose, in favour of the assignee.
In this instance, only a part of the assignor‘s interest is transferred. The effect of this is that in situations
where the transfer was absolute, the assignee would be able to sue in his own name. Where it is not
absolute however, he must join the assignor before he can enforce his rights over the chose.

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Where the chose is legal though, it is immaterial whether it is absolute or not, the assignee must join the
assignor.

Legal Assignment
The Common law rule against assignment of choses in action was only lifted in 1875 and this was via
the provision of the Judicature Acts, particularly S. 25(6). This provision is impari materia with S.
150(1) Property and Conveyancing Law.
The purport of those provisions is that there can be absolute assignments by writing of any debt or other
legal thing in action when express notice in writing has been given to the trustee of the liability. Also, it
shall be effectual to transfer the legal right to sue in respect of such thing, along with the legal and other
remedies in respect of it and the power to give a good discharge for the chose without the assignor‘s
permission.
The provisions clearly contain ingredients that would make a legal assignment valid and these include
the following:
 The assignment must be in writing and signed by the assignor.
 It must be in respect of some existing debt or other legal thing in action and this includes
equitable choses in action.
 It must be absolute.
 There must be an express notice in writing given to the debtor, trustee, or other person from
whom the assignor would have been entitled to receive the debt or claim the thing in action.
The assignment takes effect from the date that notice is given. Failure to give notice at all or failure to
give it in writing or failure to even execute the writing in the first place will not invalidate the
assignment.
Rather, it becomes an equitable assignment instead of a legal one. Further, there is no requirement for
consideration here.
Effect
The position at Common law before the Act amended it was that the assignee had no right independent
of the assignor‘s and was obligated to sue in the assignor‘s name if he wanted to enforce his rights over
the chose.
The Acts have however changed this and the assignee no longer needs to sue in the name of the
assignor. He can sue all by himself.

Priority Of Interests
The question of priority of interest comes up when there are two or more competing interests over
property and especially when these interests cannot be satisfied out of the total value of the property that
is subject of the interests.
These interests may be encumbrances. An encumbrance is a limiting factor on the land. It is a charge on
the property created in favour of a third party.

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Of course, the only two categories of interests that may be acquired over land are equitable and legal
interests, the former proceeding from the latter. Equitable interests would necessarily be the result of
informal, incomplete or imperfect acquisitions while the legal interest would necessarily have complied
with all formalities.
There are two basic rules that have been developed for the resolution of these conflicts. The first is the
Order of Creation rule while the second is the Order of Notice rule.
Order Of Creation/The Temporal Order Rule
This rule ranks the interests in order of creation. Thus, the first in time takes priority. It is encapsulated
in the maxim: Qui prior est tempore, potior est jure – He who is first in time is stronger in law.
The rule is however subject to notice. As such, whoever takes an interest in the property even after
notice of an earlier interest than his would have his interest postponed as against that of the other
interest. It must also be noted that the rule would only apply in case of real property.
As between competing legal interests, the rule finds clear application although its application is a bit
fanciful as it would be quite difficult to create two competing legal estates in one property. This is
because a legal estate is one that must have passed all formalities of the law.
It is a bit difficult to pass through all the formalities and still not have notice of an earlier interest. For
the rule to apply of course, both estates must have passed the test of legality with flying colours.
As between competing equitable interests, the rule would also apply. There can be several equitable
interests on the same property as they are all incomplete and fall short of the law in some respect. For an
interest to have priority however, the owner of the interest must not have had notice of any earlier
encumbrance otherwise his interest would be postponed.
Two maxims modify the Order of Creation rule materially. First, the maxim: Where there is equal
equity, the law prevails, operates to modify the rule in two ways. First, in case of conflict between
adverse claimants, one equitable and the other legal, the legal interest supersedes. Hence the maxim:
Equity follows the law.
Second, the equality here is not in terms of concurrent time of creation, rather it is in respect of the
equity of the two cases especially as regards their attitude, clean hands, notice of earlier interest etc.
Thus, in effect, the Order of Creation rule is the last resort when there is equal equity and by the
operation of this maxim, the conflict would be resolved in favour of the legal estate.
The second maxim: As between equal equities, the first in time shall prevail, also operates to modify the
rule in two ways. The first is that the equities must be equal, not in time, but in merit. The second is that
where the interests in conflict are equitable and have been found to be equally meritorious, the first to be
created takes priority as a last resort.
There are however exceptions to the Order of Creation rule, instances where an interest, even after being
first in time, would still be postponed in favour of latter interests, maybe even the last one. These
exceptions include:
 Purchase of a legal estate for value without notice
 Fraud, estoppel, gross negligence
 Registration

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Bonafide Purchaser of a Legal Estate for Value without Notice
This is one instance in which it can be said that legal interests are exceeding stronger than equitable
interests. In the case of this purchaser, no matter how equitable or meritorious a competing interest is,
his interest would always supersede and take priority over the others.
This interest is so strong that it was described by James L.J as ―an absolute, unqualified, unanswerable
defence and an unanswerable plea to the jurisdiction of the court.‖ All that can be done is to interrogate
the plea and question whether it attains the standard set by the law. Once it is found to attain that
standard, it cannot be rebutted.
The standard is strict however. The purchaser‘s successors in title would also get a good title even if
they knew about the previous encumbrances on the property. This would not apply to persons already
bound by the property though.
Bona fide
This means good faith. It embodies the whole equitable idea of conscience. There must not be any bad
vibes around him. He must be completely blameless in Equity. Once he is blameless, he has priority over
others notwithstanding the poor moral character of the vendor.
Purchaser for Value
He must have given good consideration for the property. Consideration in this instance may be
monetary. It may also be in the form of a detriment i.e. the promise not to pursue a debt. Marriage has
also been held to constitute valuable consideration.
Legal Estate
The interest obtained must be a legal estate otherwise, he would take subject to the prior equitable
interest holders. The estate may be acquired outright or by a previous owner of an equitable estate in the
property subject to the caveat that he must not have had notice of the prior encumbrance.
Notice
Notice refers to knowledge of existing facts and it may be actual, constructive or implied. It is actual
when the purchaser, at the time of the purchase or any period prior to, was aware of prior encumbrances
on the property.
It thus connotes personal knowledge, and it is irrelevant how it came to the purchaser‘s notice whether
direct or indirect. The purchaser is not however bound by knowledge which a reasonable and prudent
businessman would not act on or would consider as unreliable.
Constructive notice covers facts that are not actually in the personal knowledge of the purchaser or that
cannot be proved to be in his personal knowledge. It is enough if it can be proved that the purchaser
would have had notice had he made reasonable inquiry.
Thus, if there are sufficient facts calling for inquiry which were not inquired into by the purchaser, he
may be deemed to have had constructive notice of those facts. To discharge this burden, the purchaser
must call for and investigate the title of his vendor.
According to S. 70(1) Property and Conveyancing Law 1959, he must investigate the title for the past
30 years. Failure to do this would postpone his interest. If he deliberately abstains from investigating or
is negligent in his investigation, his interest would be postponed.

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Occupation of the property in question constitutes constructive notice to the purchaser and if he fails to
investigate, his interest would be postponed.
Imputed notice is notice to the appointed agent of the purchaser. It is imputed to the purchaser through
the actual or constructive notice of his agent. The agent must however be the bonafide agent of the
purchaser, appointed by him.
Where the agent is a lawyer, information acquired by him in another transaction will not bind his
principal in the instant transaction. It has to be in the same transaction.
Fraud, Estoppel, Gross Negligence
Fraud will operate to postpone interest in the property. Where the owner of a prior legal estate assists in
or fraudulently engineers a subsequent equitable estate in the same property, which estate was purchased
without notice of any prior legal interest, the owner of the legal interest will have his interest postponed
in favour of the equitable interest.
Gross negligence is more than just carelessness or want of prudence on the part of the legal owner.
In Akingbade vs Elemosho (1964) 1 All Nlr 154 the purchaser was in a position to find out about the
prior equitable interest. He was however negligent and failed to find out. The court held that his interest
would be postponed in favour of the equitable interest.
Where the owner of a prior estate has acted in such a way as to make the purchaser of a subsequent
estate believe that he has no right over the property, he will have his interest postponed in favour of the
subsequent interest.
Registration
The Land Registration Act provides in its S. 16 that non-registration of any instrument affecting land
would result in loss of priority of that interest. Thus, the Act affects the Temporal Order rule such that
what is material now is not the date of creation but the date that the instrument was registered.
As between legal interests and even in competition with equitable interests, it would mean that non-
registration postpones the unregistered interest.
In Amankra vs Zankley (1963) 1 All NLR 304, the same vendor conveyed the same property to the
plaintiff and defendant. The plaintiff claimed that the land was conveyed to him in August 1957 and he
registered the deed in September 1957. The defendant claimed that the land was conveyed to him in
May 1957 but he registered in March 1960. The court held that even though the defendant was earlier in
time, he loses priority because he registered it later.
Order of Notice
The rule as to order of notice applies solely to pure personality i.e. choses in action. It was laid down in
DEARLE v HALL (1823) 3 Russ. 1 where the court held that:
―where there are successive assignments whether to purchasers or chargees, of an existing equitable
chose in action, the priority of those assignments is to be determined by the order in which the
respective assignees gave notice of their assignments to the person who is to discharge the liability
arising from the assignment.‖
Thus, as far as interest in pure personality is concerned, the applicable rule is the order in which notice
of interest was given to the trustee of the assignment. In the case of a debt, the trustee would be the
debtor.

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So, for instance, if A borrows B some money, and then gives C the right to collect the debt, he has to
give notice to B. If A also gives D the right to collect the debt, and D notifies the debtor (B) first, then D
would have a priority in the debt compared to C.
The notice, according to S. 152 Property and Conveyancing Law, must be written.
The rule is also subject to notice of prior encumbrances. Thus, a subsequent encumbrancer who had
notice of an earlier interest would not obtain priority by giving notice first.

Nature Of Equitable Rights/Interests

Equitable rights are in two categories. They include those rights created by Equity and those recognized
under Equity which were hitherto unrecognized under Common law.
The recognition and protection of certain rights by Equity were as a result of the defects in Common
law.
These defects included the position that a person who agreed on a lease without completing all the
formalities took no interest in the property as well as the non-recognition of the rights of a beneficiary to
a Trust.
Equity stepped in here to recognize and protect ―imperfect‖ interests other than those which strictly
comply with the law. The extent of its protection of these rights will become apparent under the
discussion on priority of interests.
It created other interests hitherto nonexistent at Common law such as the Mortgagor‘s (borrower) equity
of redemption and his equitable right to redeem. These rights created here have no Common law
equivalents.
In fact, the rule at Common law in respect of the mortgagor was that his interest lapsed if he doesn‘t
make payment on the date agreed. Equity stepped in and gave the mortgagor a much stronger right to
redeem and also allows him transfer his interest in the property, called the equity of redemption.
One important feature of equitable rights/interests is that they are generally below the strict legal
standards set at Common law. They may not necessarily stand up to legal formalities but in some cases,
may be stronger than the legal interest.
Although, equitable interests are generally viewed as minor compared to legal interests such that legal
interests would usually take priority. As stated earlier, this would not always be the case.
For instance, it was held in Amodu Tijani vs Secretary Of Southern Nigeria that writing is unknown to
customary law. As such, the process of acquiring land under customary law is far different from the
position at law, especially without all its formalities.
Thus, a person can validly purchase land under customary law by making some sort of consideration, in
the presence of witnesses and being given possession. If some other person, trying to rely on non-
compliance with legal formality, asserts that his interest in land supercedes the earlier, his assertion
would fail even if he had complied with all the legal formalities.
See also Etajata vs Ologbo where the court held that whenever an equitable interest is coupled with
possession, such equitable interest cannot be defeated by a subsequent legal interest.

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Rights In Personam Or In Rem?
Equitable rights are considered as being rights in personam (enforceable against the conscience of an
individual) while legal rights are considered as being rights in rem (enforceable against the whole
world).
This perception leads to the conclusion that legal rights are much stronger than equitable rights since
they bind the res of the dispute while equitable rights, being in personam, can only bind the conscience
of the party.
Thus, in an action for delivery up of goods, a court of common law can simply order that the goods be
delivered up and enforce this order by forcibly taking it and delivering it up. Whereas, a court of Equity
can only order that the party in default deliver up the goods.
If he doesn‘t, the court can only imprison him until he is ready to comply. Hence the maxim ―Equity
acts in personam‖. Also, equitable interests are not deemed to be as impregnable as legal interests
because they devolve from the legal estate and as such are only binding on the owner of the legal estate.
However, it can be questioned whether Equity actually acts in personam only and not in rem. If one
steps back from the logical substance of the equitable rights and focuses on its procedures for
enforcement and consequences, it becomes apparent that the rights eventually act on the res itself rather
than on just the conscience of the party.
Equitable instruments like the writs of Assistance and Sequestration which enabled the court to order
that the injured party be put in possession or that the property be sequestered until compliance by the
defaulting party evidently act on the res.
A foreclosure order is also an instance of Equity acting against the res.
The rights of a beneficiary to a Trust also take on the toga of a right in rem as it is enforceable against
the whole world especially when it comes to tracing trust property.
It would only fail against a bonafide purchaser for value without notice. Courts of Equity can also make
orders in respect of land in a foreign jurisdiction, as long as the party can be properly served within the
court‘s jurisdiction.

How Has Equity Contributed To The Common Law Legal System?

For literature students, the Shakespearean classic – The Merchant of Venice, would ring a bell. This
story shows the absurdity that is inherent in strict adherence to the law. Without equity tempering the
provisions of the law in order to create justice, the law would end up being a tool of injustice.
Those who have not read the story might be a little bit lost here. As the story goes, Bassanio asked his
friend – Antonio, to give him some money in order to marry the woman he loves. Antonio didn‘t have
the money and he decides to borrow from a moneylender – Shylock.
Shylock doesn‘t like Antonio and has been looking for an opportunity to get back at him. He agrees to
borrow him the needed money on the condition that Antonio would give up a pound of flesh if he
defaults on the loan. Antonio accepts this condition since he had some expected shipments and was sure
he would be able to pay back.
Unfortunately, his goods got lost at sea and he could not repay the loan when Shylock asked for it.
Shylock took the case to court in order to get one pound of Antonio‘s flesh.

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Meanwhile, Bassanio hears of what has happened to his friend and he offers to repay the debt even more
than Antonio originally borrowed. Shylock rejects this because he is only interested in getting a pound
of Antonio‘s flesh.
The court, in sticking strictly to the provision of law, held that it can‘t reverse the agreement since
Antonio has already promised to give up a pound of his flesh on failure to repay the debt. As a result,
even if he subsequently gets the money, as long as he has defaulted in his debt, he has to give up his
pound of flesh.
This is a clear illustration of the injustice caused by the strict application of legal rules. Even in real-life
situations under the common law, a mortgagor cannot redeem his mortgaged property after he defaults
in his debt. This is regardless of the fact that he now has the money needed to redeem his debt.
Back to the story, a mysterious lawyer comes to Antonio‘s rescue. The lawyer argues that if Shylock
insists on getting a pound of flesh, he can go ahead. However, if on cutting Antonio‘s flesh, the court
discovers that the flesh doesn‘t weigh exactly one pound, Shylock would be in breach of the law.
In the end, Shylock can‘t get his pound of flesh and Antonio‘s gets to keep his flesh.
Thankfully, this story ends well; this was not the case for countless litigants that got injustice when the
court strictly applied the rules of common law to their case. There have been numerous contributions of
equity that have made the law more amenable to the delivering of justice.

The Contributions Of Equity To The Common Law

There are numerous instances of the contribution of equity to the common law legal system. Without
equity in the common law legal system, there would be numerous scenarios akin to the experience
between Shylock and Antonio.
I would go on to discuss some of these improvements made by equity to the common law legal system
in the subsequent headings.

Equity Recognized the Rights of the Beneficiary

Under the common law of trusts, the settlor gives his property to the trustee to manage on behalf of the
beneficiary. The common law only recognized the rights of the trustee; it essentially ignored the rights
of the beneficiary. What this meant was that the trustee could use the trust property as he likes and he
would owe no obligation towards the beneficiary.
Equity was against this; although it recognized the trustee as the legal owner of the property, the
beneficiary had an equitable interest in the property. This meant that the trustee owed a duty to use the
trust property in a way that would be beneficial to the beneficiary.
In fact, the beneficiary has a right to the property against all other persons except a purchaser for value
without notice. This means that if the trustee fraudulently transfers the property to another person, the
beneficiary has a right in the property against that person.
Equity Allowed the Mortgagor to Redeem his Property
By the strict application of legal rules, a mortgagee[1] is entitled to the property of the mortgagor if the
mortgagor[2] defaults on his debt. This means that if the mortgaged property is more than the debt, the
mortgagee can get the property when the mortgagor defaults in payment.
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Even if the mortgagor gets the money for the debt after he has defaulted, he can‘t get his property back
from the mortgagee. This is similar to what happened between Antonio and Shylock in The Merchant of
Venice.
Thankfully, equity has solved this problem by making it possible for the mortgagor to redeem his
property even after he has defaulted in paying his debt.

Equity Created Additional Legal Remedies

Equity contributed to the development of the law by creating extra remedies like specific performance
and injunction. The only remedy that was available under the common law was damages. This was a bit
problematic if there were situations where the award of damages would not be able to compensate the
affected party.
Equity granted the remedy of specific performance in order to enforce the performance of a contract
where damages would not be adequate. Equity created the remedy of injunction to prevent the other
party from performing an injurious act which the award of damages cannot remedy.
Equity Prevents People from Carrying out Fraud under the Law
There are instances where unscrupulous elements can use strict adherence to the law to cause havoc to
other parties. For instance, a party can seek to invalidate his obligation just because the agreement
doesn‘t strictly follow legal provisions.
A good example of this occurred in this locus classicus of Walsh vs Lonsdale. In this case, Lonsdale
leased a mill to Walsh for seven years. However, Lonsdale didn‘t make use of a deed to convey the lease
as required by law.
When Lonsdale requested for payment, Walsh refused on the ground that Lonsdale didn‘t grant the lease
with a deed. He argued that since the parties didn‘t use a deed in the grant of the lease, the lease is
invalid and he can escape liability.
The court applied the equitable maxim ―equity regards as done that which ought to be done”. The
court held that the lease was valid since the intention of the parties was clear in making the lease
agreement.
The Doctrine of Equitable Estoppel
Another major contribution of equity to the development of the common law legal system is the doctrine
of equitable estoppel. The court established this doctrine in the popular High Tree Case. With this
rule, equity doesn‘t allow a person to go back on a contractual promise when the other party has already
acted on it.
Conclusion
Without equity in the legal system, the administration of justice would surely be as hilarious as the
scenario between Shylock and Antonio in The Merchant of Venice.
If the contributions of equity are absent in the legal system, the law would surely cause a lot of hardships
to all parties. As a result, no one should underestimate the importance of equity in any way.
[1] The person who lends the money e.g the bank.
[2] The person who borrows the money and puts up his property as security.

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 Law of equity – general principles of equity
Table of Contents

 Introduction
 Principles of equity
1. Equity will not suffer a wrong to be without a remedy
2. Equity follows the law
3. He who seeks equity must do equity
4. He who comes to equity must come with clean hands
5. Delay defeats equity
6. Equality is equity
7. Equity looks to the intent rather than the form
8. Equity looks on that as done which ought to have been done
9. Equity imputes an intention to fulfill an obligation
10. Equity acts in personam
11. Where the equities are equal, the first in time prevails
12. Where the equities are equal, the law prevails
 Conclusion
 References

Introduction
Equity is a separate system of law from the Common-Law. It has different rules, principles, and
remedies. Thus, to understand the principles on which the Law of Equity is based, we must understand
its origin and the reasons for its requirement despite the presence of a system of law, i.e. the Common
Law. Common Law is the body of customary law which originated in the Curia Regis (King‘s Court),
London. English Common Law was primarily developed by judges and was based on judicial decisions
and precedents. The country saw the need for the Law of Equity because of the following two main
reasons:
 Under Common Law, there was only one remedy available, i.e., damages. Thus, a just and fair
remedy couldn‘t always be given through Common Law where monetary compensation was not
suitable. This remedy did not always have a significant concluding impact within cases.
 A civil action under Common Law could only be started by the means of a writ which was a legal
document where it was written why and on what legal basis a person was being sued. Problems
arose when a matter was not covered by any writ. Making of the writs with every new case was
stopped in the 13th century and this meant that if a case was not already covered by the writs, it
was not carried forward.
This generated a huge amount of dissatisfaction among the public because many times they had to settle
with the inappropriate remedies or their cases were not even carried to the court as the writs were too
narrow or rigid. Subsequently, the Court of Chancery was directed to take up the case which was
referred to the king by petition and the Chancery Court developed the Law of Equity. Equity was mainly
thought of as fairness and it was a very powerful law as it overcame the conflicts with the Common
Law. The Chancellor decided the cases of which the King had taken note, he did so by largely relying on
his sense of fairness and justice and thus developed a large body of principles which became the Law of
Equity. It was very important to solve the conflict between the Law of Equity and the Common Law,
this was achieved in the 1615 Earl of Oxford‘s Case. In this case, the King decided that between the
conflict of Common Law and Equity, Equity should prevail.

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This article mainly discusses the general principles on which the Law of Equity is based and the
remedies available therein.

Principles of equity
The body of the Law of Equity is preserved in the following twelve maxims. These maxims are general
principles adopted to administer justice and fairness. They govern the Law of Equity and are
discretionary.

Equity will not suffer a wrong to be without a remedy

This maxim, in Latin, is ―Ubi Jus Ibi Remedium ‖ which means ―where there is a right there is a
remedy‖. The maxim states that in situations where the common law confers a right, it also gives a
remedy for infringement of that right. It must be kept in mind that this principle is applicable only where
the right and the remedy both are within the jurisdiction of the court. In the Law of Equity, injunction
and specific performance are also the types of remedies available. In Ashby v. white a qualified voter
was not allowed to vote and thus he sued the returning officer, this case deals with the principle laid
down in this maxim, i.e. if a person has been granted a right, he is also granted with a remedy.

Equity follows the law

This maxim is also expressed as ―aequitas sequitur legem‖, which means that equity will not allow a
remedy that is contrary to the law. This maxims lays down that equity supplements law and does not
supersede it. The discretion of the court is governed by law and equity which are subservient to one
another. Wherever the law can be followed, it must be followed. In the cases where the law does not
apply specifically, this maxim suffers limitation. But in modern-day England and Wales, the law follows
equity. Section 49(1) of the Senior Courts Act,1981 clearly specifies that in case there is a conflict
between the rule of law and equity, equity shall prevail.

He who seeks equity must do equity

This maxim states that the plaintiff is also subject to the powers of the court and is thus obligated to
perform his duties following the principle of equity. The concern of this maxim is the future conduct of
the plaintiff. Thus, this maxim applies to the party who seeks equitable relief as it stipulates that the
plaintiff must also recognize and submit to the right of his adversary. This maxim was attracted in the
case of Lodge v. National Union Investment Company Limited where Lodge borrowed money from an
unregistered moneylender and thus upon an action by him to recover the securities, the court refused to
make an order except upon the terms that Lodge should repay the money which had been advanced to
him. This maxim is also applicable in the following legal provisions:
 Section 19A of the Indian Contract Act – the plaintiff must restore all the benefits arising from
the contract which is rescinded by him.
 Section 35 of Transfer of Property Act – the doctrine of election says that a benefit under a legal
instrument must be adopted with all of the provisions and obligations under such an instrument.
 The Doctrine of Consolidation of Mortgages- where a borrower has mortgaged different
properties to secure separate debts, and he defaults on one of those debts, this doctrine allows for
the lender to pool the assets which were secured by the borrower and to realise those secured
assets against the total sum owing.
 Order 8, Rule 6 of the CPC, the doctrine of set-off – in case of mutual debt between two litigating
parties, the amount due to one party shall be set-off by the same amount which is due to the other
party and only the residuary amount shall be claimed.

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He who comes to equity must come with clean hands
This doctrine relates to the past conduct of the parties and states that the person who comes to the court
seeking equity must not have involved in an inequitable act himself in the past. This maxim is concerned
with the past behaviour of the plaintiff. The maxim does not concern the general behaviour of the
plaintiff, the defence of unclean hands is only applicable in situations where there is nexus between the
applicant‘s wrongful act and the right that he wishes to enforce.
This principle was upheld in the case of D & C Builders Ltd v. Rees where the claim of the plaintiff to
apply promissory estoppel was rejected because he had taken unfair advantage of the poor financial
position of the defendant‘s builder company and thus had not come with clean hands.
If the plaintiff is involved in fraud or misrepresentation that concerns the respective case then he cannot
demand equity. This principle is also adopted in Section 17, 18, and 20 of the Specific Relief Act, which
lay down that a plaintiff‘s unfair conduct will disentitle him to the equitable relief of specific
performance of a contract.

Delay defeats equity

The Latin maxim for this principle is ―Vigilantibus non dormientibus aequitas subvenit‖ which means
that Equity assists the vigilant and not those who sleep on their rights. Unreasonable delay in bringing
forth a claim is known as laches. Laches may also result in dismissal of the claims. Thus, a party must
assert an action within a period of reasonable time. There are certain situations where the law of
limitation is expressly applied, in such cases, there is a particularized legal situation where a time period,
which has been expressly prescribed, has elapsed and the party is barred from bringing a suit of action.
In case of laches, the defence of acquiescence can be applied by the court and the plaintiff may be
disallowed from seeking an equitable remedy as the court would assume that he has acquiesced to the
questionable actions of the defendant. The equitable rule of acquiescence and laches was first introduced
in the case of Chief Young Dede v. African Association Ltd.

Equality is equity
This principle is expressed by the Latin maxim Aequitas est quasi aequalitas which means equality is
equity. This maxim implies that as far as possible, equity strives to put the litigating parties on an equal
level and equate their rights and responsibilities. The ordinary law may give one party advantage over
the other but the court of equity, wherever possible, puts the parties on an equal footing.

Equity looks to the intent rather than the form

This is the maxim by the means of which an equitable remedy was established which allows for the
terms of a contract to be interpreted by taking into account the intention of the parties. The common law
was very rigid and could not respond favourably to demand of time, this meant regarding the form of the
contract more important than the substance. Equity, on the other hand, looks to the spirit and not the
letter of the contract. This principle is enshrined in the provision for relief against penalty and forfeitures
which states that the object of a contract is to perform it and not the compensation, thus the
compensation must be proportionate to the damage and not benefit the receiver (Section 74 of the Indian
Contract Act provides for claiming reasonable compensation). In the case of the contract for the sale of
land, if the party fails to complete within a fixed period, equity allows reasonable time to the party to
complete it (Parkin v. Thorold).

Equity looks on that as done which ought to have been done

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This maxim states that in cases where individuals are required, by law or by agreement, to perform any
act of legal significance, equity will regard that act as having been done as it ought to have been done
even before it actually happened. This principle results in the legal phenomenon of equitable conversion
under which the buyer obtains the equitable title to the property even before the sale has been legally
effected.

Equity imputes an intention to fulfill an obligation

This maxim means that if a person is obligated to do one act and does another, the act done by him will
be taken as a close enough approximation to the fulfillment of the required obligation. For example, if a
debtor leaves a legacy to his creditor which is equal to or greater than the debt owed by him, then equity
would regard such legacy as the fulfillment of the obligation of the payment of the debt owed by the
person.

Equity acts in personam

This maxim states the equity applies to a person rather than a property. In England, the Court of
Common law and Chancery Courts were distinguished by the fact that the former had authority over the
person as well as property but the latter only acted over people. The Equity court‘s coercive power arose
from their authority to hold the violator in contempt of court and punish accordingly. Since the law of
equity was applicable to the persons and not the property, it could also apply to the property outside a
jurisdiction, provided that the person was within the jurisdiction. In the case of Penn v. Lord
Baltimore, an order of specific performance was made for the plaintiff who brought a boundary dispute
case to English Court, yet the land was situated in Maryland, USA. the jurisdiction of the court was
applicable to the parties as they both were English and lived in England.
Where the equities are equal, the first in time prevails
Where the legal estate is absent in the matter and the contest is among equitable estate only, the person
whose equity is attached to the property first in time will be entitled to priority over others. Here, the
term equities refer to multiple equitable interests. Thus, in case two equities are equal, the original
interest, i.e., the first in time will succeed. For example, if A grants an equitable mortgage to X and then
subsequently grants the same mortgage to Y, X‘s mortgage shall take priority.
Where the equities are equal, the law prevails
In case neither of the parties has been wronged and both stand at an equitable position, the legal remedy
will be prioritized. Equity shall not provide any specific remedy in case both the parties have equal
causes. Thus, in such cases, the parties must bring a legal action rather than an equitable action.

Conclusion
The laws related to equity have evolved through precedent and the intention is to grant equitable rights
and remedies to the parties. The decisions of equity have largely been based on the judge‘s discretion
and understanding of the fair and just cause. Equity dates back to the centuries ago and is still as
relevant, so is the case with law. Law and equity both are important for justice. Where the rigidities of
the law threaten justice, equity prevails, and where equity has no remedy the letter of law is followed.
Justice, thus, depends upon both and thus, both must be consulted in order to deliver justice.

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Maxims Of Equity: Everything You Need To Know
Equity developed in reaction to the excesses of common law. As a result of this, it‘s principles are quite
ad-hoc. Meaning that they were made as circumstances dictated. The closest thing to guiding principles
for equity are the maxims of equity.
The maxims of equity are originally latin phrases that embody equitable principles. There are a lot of
these maxims and they could be quite inexhaustible.
However, according to Snell‘s Equity, it is possible to summarize them under two maxims: Equity will
not suffer a wrong to be without a remedy and equity acts in personam.
This work would go on to address some of these maxims below. Hopefully, at the end of this work,
you‘ll have a grounded understanding of that the maxims of equity are.

List Of Maxims Of Equity

The following are some of the maxims of equity:
1. Equity is equality
2. He who comes to equity must come with clean hand
3. Equity will not suffer wrong to be without remedy
4. Delay defeats equity
5. Equity abhors forfeiture
6. Equity follows the law
7. Equity regards as done what ought to be done
8. Equity looks to intent rather than form
9. Equity acts in personam
Note that the above list is not exhaustive, as there are numerous maxims of equity. They might require
hundreds of pages to completely analyse. So, we have to highlight some of the important ones.

Equity Is Equality
This maxim of equity stems from the notion of impartiality and equality. It simply means that the parties
would be treated equally. Equity has been able to apply this maxim in numerous ways.
Some of them are:

1. Presumption of Tenancy in Common

Under common law, whenever two or more people acquire a property together, it would be taken that
their title in the property would be covered by joint tenancy.
The implication of this is that under joint tenancy, if any of the joint owners of the property dies, the
surviving owners would acquire the interest of the deceased in the property.
For instance, if Tolu and Ade both buy a piece of land. if Ade dies, under common law, Tolu would
acquire Ade‘s interest. Meaning that he becomes the full owner of the land.
This is called the principle of survivorship — jus accrescendi in latin. It‘s quite obvious that this is very
unfair.
Fortunately, equity introduced the concept of tenancy in common. The concept of tenancy in common
means that when one of the joint owners dies, in equity, the surviving owner holds the property in trust
for the beneficiary of the deceased owner.
So, let‘s imagine that Tolu and Ade both contribute towards acquiring a piece of land. If Ade dies, Ade‘s
representative, this could be his wife, or whoever inherits his estate, would have a right to Ade‘s interest
in the property. As a result of the tenancy in common, Tolu would be presumed to hold Ade‘s interest in
the property in trust for Ade‘s representative.

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Equity presumes tenancy in common in three broad circumstances:

Purchase in Unequal Shares

Where joint owners of a property purchase the property in unequal shares, equity would take it to mean
that the parties intend for it to be a tenancy in common. As such, when one of them dies, the surviving
partner would hold the property as trustee for the deceased‘s beneficiary.
It should however be noted that in the case of Lake vs Craddock, the court decided that if the parties
contributed to the purchase/acquisition of the property in equal shares, it means that they intend for it to
be a joint tenancy. What this means is that if any of the parties die, the surviving party would acquire the
existing interest in the property.

Loan on Mortgage
When there is a loan for a mortgage acquired by two or more people, the courts of equity will
automatically presume that it is tenancy in common. This occurs whether or not the contributions
towards the mortgage are split equally or unequally.

Partnership
If two or more people come together to run a business as partners, any property they acquire would be
presumed to be affected by Tenancy in common.

2. Severance of Joint Tenancy

In a situation where the parties purchase the property in equal shares, it would be regarded as a tenancy
in common under law. However, where one of the parties alienates his own portion/interest in the
property the courts would take it to mean that the joint tenancy has been severed.
In the case of Ipaye vs Aribisala (1930) 10 NLR. 10 the plaintiff‘s mother left her property to him and
his brother in equal shares. As a result, the common law doctrine of joint tenancy applied to the shared
property in question.
However, the brother of the plaintiff died intestate and the plaintiff discovered that his brother had
already used his own portion of the property as security for a loan.
The court held that by mortgaging his portion of the property, his brother has alienated his right in his
own portion of the property. As such, the plaintiff could not control the entire property by virtue of joint
tenancy.
In essence, the alienation of the property by his deceased brother had severed the joint tenancy in
operation between him and the plaintiff.

3. Equal Division
This occurs in a situation where a property is to be divided and there is no clear-cut legal basis for the
division. In this instance, the courts in applying the maxim of ―equality is equity‖ would divide the
property evenly.
In the case of Maynard vs Jones (1951) Ch. 572, a husband and wife both jointly operated a bank
account. They regularly deposited different sums of money into the account. When the couple divorced,
the court had to decide how the sums in the bank account would be divided.
The court applied this maxim and as such, the property was divided evenly between the husband and the
wife.

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He Who Comes To Equity Must Come With Clean Hands
This maxim of equity provides there is no remedy for a person who is himself guilty of some misdoing
in the particular case for which he wants to claim rights. This simply means you must not have acted in a
way inconsistent with the law in a particular matter for which you seek redress.
For example a tenant owing his landlord rent, cannot bring a claim against him for ‗forceful eviction‘.
Likewise, in situations where the plaintiff had in that instance broken the law, equity will decline to
provide a remedy since this would tarnish the image of the court.
This can be seen in the case of Everett v Williams (1893) 9 LQR 197 where both parties were highway
robbers. The plaintiff sued the defendant for not properly accounting for goods gained in the course of
their joint ―business dealing‖.
When the real nature of things was discovered, the case was not only dismissed, the courts awarded
costs to be paid by the plaintiff‘s lawyer who had the audacity to bring such a case to court.
The two highway robbers were apprehended, prosecuted and finally executed.
Also in the case of D&C builders ltd v Rees; The plaintiff, a building company, constructed a house for
the defendants for the total sum of £732. The defendant (Rees) had already paid £250 and when time
came for a balance of £482, the defendant claimed the work was defective and were only willing to pay
£300.
The plaintiff was in dire need of money at that point in time. So, it accepted it, but later made a claim in
court.
The defendant attempted to rely on the doctrine of ‗promissory estoppel‘. Lord Denning refused the
application of this principle on the grounds that they had taken advantage of the plaintiff‘s financial
difficulties and as such had not acted with ‗clean hands‘.

Equity Regards As Done What Ought To Be Done

This maxim of equity usually applies to cases involving specific performance. That is to say, if two
parties had a contract to perform a particular obligation, equity puts them in the position they would
have been in if the obligation had been performed.
In a situation where one of the parties was expected to fulfill a particular obligation but only made part
performance, equity regards it as though he has fully performed his obligation.
In doing so, it focuses more on the consequences that would normally follow from the fulfillment of that
obligation.
The courts applied this maxim in the case of Dr N.A Iragunima vs Rivers State Housing and
Property Development Authority & Ors (2003) SCNJ 207. In this case, the government of Eastern
Nigeria leased a plot of land to Nwosu for seven years. Nwosu subsequently assigned the lease to
Okoro. In 1973, Okoro applied for a renewal of the lease for sixty years.
The government granted his application and he paid all the necessary fees required for this. However,
the government did not draw up a formal feed for execution of the lease. Okoro built a house on the land
which he subsequently sold to the plaintiff.
He executed a deed of assignment in favour of the plaintiff, applied to the government to formally assign
it and paid the consent fees required by the government.
The plaintiff paid the ground rents and all the required fees on the land till 1986 when she discovered
that the government resold the land to a third party as an abandoned property.
The plaintiff sued the government and the third party, requesting the court to declare that the sale to this
third party was null and void and that the property rightly belongs to her. She also requested damages
for trespass and sought an injunction preventing this third party and others from trespassing on the land.

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The defendants relied on the fact that no proper deed of assignment was drawn up between Okoro (who
sold the land to the plaintiff) and the state government. As such, they interpreted this to mean that the
land didn‘t legally transfer to the plaintiff.
The trial court ruled in the plaintiff‘s favour. Aggrieved, the 2nd defendant (third party) appealed to the
Court of Appeal. The Court of Appeal ruled in favour of the plaintiff. The appellant then appealed to the
Supreme Court.
The Supreme Court held that the fact that there was no formal deed of assignment drawn up between the
State Government and Okoro doesn‘t mean that the whole transaction is invalid.
In applying the principle of ―equity takes as done, that which ought to be done‖ the court held that
Okoro had a valid equitable interest in the property and could validity transfer the property to the
plaintiff.

Equity Will Not Suffer A Wrong To Be Without A Remedy (Ubi Jus Ibi Remedium)
This maxim of equity is similar to the much broader legal principle ‗ubi jus,ibi remedium‘ (where there
is a wrong, there is a remedy). It simply provides that wherever there is a right conferred, should an
injury occur, there should be a co-existing remedy provided to sooth that injury by equity.
In the case of Ashby v White a qualified voter was not allowed to vote. Despite this, the candidate he
wanted to vote for still won the election. Regardless of this, Ahby sued the officer who prevented him
from voting.
In his defence, the officer contended that since his candidate went on to win the election, no damage was
done to the plaintiff and as such, no remedy should be afforded to him.
The courts held that in spite of no direct damage being done to him, he had a right to vote and was
denied that right. As such, where a right has been breached, the law has to provide a remedy to resolve
this breach of right. Thus birthing the maxim ubi jus, ibi remedium.

Delay Defeats Equity

This maxim of equity talks about the fact that equity would not assist a ‗stale claim‘. This simply means
the failure of the plaintiff to present his case at a reasonable time may translate to an implied foregoing
of such rights.

Statutes of Limitation
This principle of equity has its roots in the statutes of limitation. Initially, the statutes of limitation only
applied to courts of common law. Subsequently, they also became applicable in the Court of Chancery.
For instance, S. 24 of the English Real Property Limitation Act of 1833 provides that an action to
recover rent or land in equity would be subject to the same period of limitation that applied in common
law cases. Also, S. 8 of the English trustee Act of 1888 limited the period within which to bring actions
for breach of Trust.
In Nigeria, the Limitation Act of 1966 (which has now been localised to the Limitation Law of each
state) provided the timeframe within which actions should be brought in Nigeria.
For instance, it provides in S. 31 that actions to recover money or property related to breach of trust
must be brought before the court within a period of 6 years.
However, this limitation doesn‘t apply in situations where the trustee is fraudulent. It also doesn‘t apply
to the recovery of property that a trustee has wrongfully converted to his own use.
In determining whether or not an action is statute barred, it‘s important to understand when the time
starts counting. The courts aptly made this clear in the case of Board of Trade vs Cayner, Irvine and
Co Ltd where it stated that:

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―Time therefore begins to run when there is in existence a person who can sue and another who will be
sued and when all facts have happened which are material to be proved to entitle the plaintiff to
succeed.‖

The Doctrine of Laches

Whenever a subject matter doesn‘t fall under the statute of limitations, the courts would apply the
doctrine of laches. This doctrine was well elucidated by the Lord Selbourne in the case of Lindsay
Petroleum vs Hurd where he stated:
―Now the doctrine of laches in courts of equity is not an arbitrary or technical doctrine. Where it would
be practically unjust to give a remedy either because the party has by his conduct done that which might
fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though
perhaps not waiving that remedy, yet put the other party in a situation in which it would not be
reasonable to place him if the remedy were afterwards to be asserted; in either of these cases lapse of
time and delay are most material.‖
What this essentially means is that if a person has acted in a way which can be interpreted to mean that
he has waived his right, he cannot come back later to try to enforce that right.
An exception however, would be in a situation where the plaintiff previously did not have any
awareness of the existence of such rights, there was undue influence, or he suffers a disability preventing
him from enforcing the right.
Note that in the case of Nwakobi vs Nzekwu (1964) 1 All ER 1019 the court held that unlike estoppel,
laches would not bind successors in title since it is a personal disqualification.
Under normal parlance however, it is not expected that an individual should delay in exercising his
rights as the court would not take such an individual seriously.
Take for instance the case of Elebanjo v Chief Mrs Ganiyat Daudu where the case was instituted
originally in 1984 and appealed virtually a decade later in 1996.
This same notion is expressed in other equitable maxims such as ‗Equity aids the vigilant‘ and ‗Equity
does not favor the indolent.‘

Equity Follows The Law

The primary aim of equity is not obstruction of law or contradiction of it. Rather it aims at perfecting
defects, mitigating harshness and clarifying inconsistencies.
Thus since the initial origin of equity, the Courts of Chancery never intended or claimed to override the
common law. As such when a rule is direct, clear and applicable to a certain case, the Courts of
Chancery cannot deviate from the ruling of common law courts.
It should also be noted that just like the Courts of Common Law, the Courts of Chancery are bound by
provisions of a statute. If a statute is clear and concise the courts of chancery have to follow the statutory
provision.
However, equity would not follow the direct provisions of statute if it is used as an instrument of fraud.
This especially applies in cases like concealed fraud.
For instance, the Limitations Act of 1966 provides that there is a 6 year period within which to bring
actions related to contract or tort. However, it is possible for a person to fraudulently breach a contract
and conceal this past the period of limitation. When this occurs, equity will not strictly apply the 6-year
provision of statute, but will instead start counting the period of limitation from the date the fraud was
discovered.

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A good case in point is the case of Michael Arowolo vs Chief Titus Ifabiyi (2002) 2 SCNJ 65. In this
case, the plaintiff borrowed a sum of money from the defendant in 1978 and used his landed property as
a mortgage for the loan.
After paying back the loan, he demanded for his property, but the defendant didn‘t give him back the
title document. He continued requesting for it until the defendant confessed in 1987 that he used the title
document to get a loan from his own bank.
As a result of this, the plaintiff sued to recover his title document. The court found in his favour even
though the contract between the plaintiff and defendant was far back as 1978 (9 years before the
action).
The court reasoned that the statute of limitation didn‘t start counting from 1978. Rather, it started
counting from 1987 when the plaintiff discovered the fraud.
This maxim is further exemplified in the case of Edigin v Ezenwa where the court stressed that equity is
a constituent of the legal system alongside the law for the attainment of justice, and situations wherein
equity would prevail would be instances where common law was excessively rigid or archaic.

Equity Looks To The Intent Rather Than The Form

This maxim of equity demonstrates how equity looks beyond just the ‗form‘ of a contract to the actual
‗intent‘ behind such agreement. This is in contrast to the more rigid common law which is satisfied with
the appearance of a transaction.
Take for instance the sale of a land. If the buyer fails to pay within the fixed period of time, at common
law he is in breach of contract. Whereas, equity would allow for a ‗reasonable time‘ for payment.
At common law, time is of the essence in a contract. As a result, if a party to a contract does not perform
his obligation on time, the aggrieved party can sue for damages or breach of contract.
In equity, instead of suing for damages, one can sue for specific performance of the contract. This
ensures that the contract is still performed instead of it being totally terminated.
It should be noted that in the case of Mustapha vs SCOA (1955) 21 NLR 69 the court stated that in
equity, time is of the essence in the following circumstances:
 When the parties expressly state that time is of the essence
 When the property in question is one that requires timeliness.
 When time is made of the essence by notice.

Equity Acts In Personam

This maxim can be traced to the initial jurisdiction of the Courts of law and the Courts of Chancery in
that the former had jurisdiction on both persons and property whilst the latter had jurisdiction on persons
alone.
For instance, when enforcing judgments the Courts of Common Law could forcibly transfer property
that is judgment debt to the plaintiff.
However, the Courts of Chancery don‘t really do this since they act in personam (against a person) and
not in rem (against property). So, instead of forcefully transferring the property, the Courts of Chancery
normally acted against the judgment debtor personally.
This meant that he was either thrown in jail or held for contempt of court till he complied with the
court‘s order.
Subsequently, equity evolved to the point where it created the order of sequestration to deal with parties
who refused to comply even when thrown in jail. By an order of sequestration, the court appoints an
officer to confiscate the property of the judgment debtor till he either complies or until the debt is
recovered.

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Equity acting in personam is also quite useful when it comes to enforcing judgment in foreign
jurisdictions. If the property in question is not within the court‘s jurisdiction, as long as the person is, the
courts can order her to implement its judgment.
For instance, in the case of Ayinule vs Abimbola (1957) LLR 41 a Nigerian court granted an injunction
preventing a person within its jurisdiction from carrying out an act outside its jurisdiction.
Nevertheless the courts of equity have developed in such a way as to cover property assets as well but
the primary focus remains attaining justice for persons.

Conclusion
Conclusively, it has been stated that the entirety of these maxims can be fused into just two: ‗equity will
not suffer injustice‘ and ‗equity acts in personam‘. Needless to say, these maxims may not necessarily be
absolute or all-encompassing, but they convey the intention behind courts of equity which is ultimately
the acquisition of justice.

Maxims of Equity Explained (With Application and Limitations)

Maxims of Equity: Maxims are pithy expression of general principle or rule. Maxims of equity are
those principles developed by the court of chancery in its effort to ameliorate the hardship of common
law. Through these maxims, the court of chancery found its way to escape the hardship of common law
and provide fair and conscionable remedies where there is none.
There are majorly twelve of these maxims. Aside the major twelve, there are other sub-maxims which
the court of chancery also employed while attaining the same end. But for the purpose of this article, we
shall focus on the twelve maxims which are regarded as the majors. They also in one way or the other
cover the end purpose of the sub-maxims.

The 12 Major Maxims of Equity

1. HE WHO SEEKS EQUITY MUST DO EQUITY: this maxim means that any person who comes
to the court of equity to ask for a remedy must be willing to submit to that which is required to do. The
submission here refers to the person‘s future conduct and not to the past.
Application of the Maxim
a. Doctrine of Marshalling: under equity, a person who has several means of satisfying his credit shall
not be allowed to prejudice another whose credit can only be satisfied from one. This principle is applied
where there is lending or property or mortgage.
By way of illustration: where A is entitled to satisfy his credit from two properties X and Y, and B is
entitled to satisfy his own credit from property Y only, under equity, A would be required to proceed his
satisfaction with property X while he leaves property Y for B to start collecting from. Under this setting,
A has been required to do equity by being fair to a co-creditor in respect of one property, so that he shall
not go with nothing. Where however, A refuses to leave property Y for B, equity will subrogate A‘s
interest with that of B and entitle B to start satisfying his credit from property X which is usually of
higher means.
Exception to the Application of Marshalling
Doctrine of marshalling will not apply where there is a third party encumbracer. This may arise where
there is a third person who has an interest in the property or means from which parties are to satisfy their
credit. In such a case, the court will devise other means to satisfy the parties.
b. Doctrine of Consolidation: where a person creates a charge or mortgage in respect of two distinct
properties, the transaction is said to be consolidated. The rule therefore is that one of the properties in

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respect of which charge or mortgage is created cannot be redeemed to the exclusion of the other. In
other words, both properties must be redeemed in order for the transaction to be deemed discharged.
By way of illustration: A mortgaged his property X and Y for a loan of two million naira, A should not
be heard to pay one million naira in redemption of property X. the two million naira payment must be
completed which entitles him to redeem X and Y property at once. Where A seeks to redeem a
consolidated transaction, he must be willing to do equity by redeeming all so consolidated. The reason
for this rule seems to be with respect of the value of the properties so consolidated, where one has a
greater value than the other, considering the fact that a mortgaged property should be greater in value to
the amount loaned.
Limitations to the Doctrine of Consolidation
The doctrine of consolidation has been abolished by section 17 of the property and Conveyancing Act
and section 115 of Property and Conveyancing Law of Western Region. Therefore, now,
consolidated mortgaged properties can be redeemed to the exclusion of the other.
What are the doctrines of equity?
Where the parties expressly agree that a consolidated mortgaged property can be redeemed to the
exclusion of the other, the law shall give effect to their intention.
c. Doctrine of Election: this arises where a Donor makes a gift of his property to A and by the same
instrument, gifts A‘s property to B. under this setting, A has been put to election. He may elect either
against or under the instrument. If he accepts the gift and surrenders his to B, he has elected under the
instrument. Where he rejects the gift or refuses to surrender his to B, he has elected against the
instrument. He may however, remedy this by paying B the value of that his property so gifted by the
Donor.
For there to exist an election:
There must be a grant by the donor
A‘s property so gifted to B must be belonging to A
The gift must be by the same instrument
The grant must be unequivocal
d. Illegal Loans: by the virtue of the Money Lenders Act of 1990, a money lender must be registered,
otherwise he has no remedy. However, in LODGE V NATIONAL UNION INVESTMENT CO, the
court held that a mortgagor who collected loan from an unregistered money lender must do equity by
paying off the mortgage debt before he can redeem his property.

2. HE WHO COMES TO EQUITY MUST COME WITH CLEAN HANDS: This implies that he
who seeks to enforce an action in equity must have clean hands in respect of that transaction. Clean
hands here imply that his conduct in respect of that transaction must be unimpeachable.
The conduct in question here is the parties‘ past conduct in respect of the particular transaction which
brings them to court. The parties‘ personality or general good and bad conduct is immaterial.
What are the 12 maxims of equity? Explained
Application of the Maxim
a. Illegal contract: equity does not intervene when the subject matter of the suit emanate from an illegal
transaction. In EVEREST V WILLIAMS (THE HIGHWAY MAN CASE), the parties brought
question as to the fair share of their business transaction which was armed robbery. The court struck out
the case for being impertinent, arrested the parties and awarded cost against the attorney.
b. Unclean Business: where the subject matter of a suit is an unclean business, the court of equity will
not intervene.

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c. Infant Misrepresentation: an infant who misrepresented herself to be of age and receives money
from her trustee shall not be allowed to plead that she was an infant at that time in order to claim the
money again. Overton V Bannister
d. Fraud: Equity does not intervene where there is element of fraud implicated against the plaintiff.
e. Breach of Restrictive Covenant in a Lease: a person who is in breach of covenant in a lease shall
not be allowed in equity to succeed to succeed in an action against his landlord.
Limitations to the application of the Maxim
a. Public Policy: equity will intervene where public policy is at stake, even though a party‘s hands are
unclean.
b. General Conduct: equity is not interested in the general conduct of the parties.

3. EQUALITY IS EQUITY: under this maxim. Equity seeks to ensure fair and equal share. Equity
does not play favourite.
Maxims of equity explained with their applications and limitations
Application of the Maxim
a. Presumption of Tenancy in Common: equity abhors joint tenancy due to the rule of survivorship
(jus accrescendi) which makes properties devolve to co-partners or co-owners instead of to the party‘s
estate. As a result, equity presumes tenancy in common in any slightest of its opportunity.
Instances Where equity Presumes Tenancy in Common
Purchase in Unequal Shares: where property is purchased through monies contributed unequally,
equity presumes a tenancy in common and upon death of any of the contributors, his interest in the
property devolves to his estate. See the case of Lake V Craddock.
Loan on Mortgage: where property is mortgaged in favour of more than on mortgagee, equity
presumes it to be tenancy in common, so that where one of the mortgagees dies, the co mortgagees does
not absorb his interest in the mortgage transaction, rather it goes to the deceased mortgagee‘s estate.
Partnership: where there exist partnership, equity presumes tenancy in common, that upon the death of
any partner, his interest devolves to his estate and not be absorbed by the co-partners.
Severance of Joint Tenancy: where a joint tenancy is severed, equity presumes tenancy in common in
order to avoid the incidence of survivorship. Joint tenancy may be severed by alienation inter vivos,
surrender, merger, forfeiture, etc.
b. Equal Division: Where a property is to be shared and there is no prescribed basis for its division,
equity comes in and shares it equally. See Jones V Maynard.
Failure of Vestment: where property has been shared but due to some reasons (for eg. death of a party),
a share refuses to vest; equity will share his portion equally if there is need for it to be shared again.
Husband and Wives: upon dissolution of marriage between a husband and wife, equity shares their
property amongst them equally if there is no predetermined mode of share between them.
Exception to the Maxim
Where husband and wife operate a joint account or business, this is clearly a joint tenancy. On the death
of any spouse, the rule of survivorship will apply so that the surviving spouse absorbs the whole interest.

4. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT REMEDY: this means that for
equity, once there is wrong, there should be a remedy.
Application of the Maxim
a. Trustee: At common law, trustee is recognized as the legal owner of a trust property. The beneficiary
is not recognized. Under equity however, equity recognized the interest of the beneficiary and requires

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the trustee to act conscionably with the trust property. The beneficiary can in equity, maintain action
against the trustee if he misappropriates the trust property.
b. Mortgage: At common law, once the redemption date has passed, the mortgagor can no longer
redeem. Equity recognizes the hardship which this setting causes to the mortgagor and invents the equity
of redemption which gives the mortgagor the right to redeem even after redemption date has passed.

5. EQUITY SEES AS DONE THAT WHICH OUGHT TO BE DONE:

Application of the Maxim
a. Contractual Agreement: where a party has performed his own part of the contract, equity seems the
other party as though his own obligation has been performed. See the case of IRAGUNIMA V
RIVERS STATE HOUSING AND PROPERTY DEVELOPMENT AUTHORITY & ORS. This
however does not operate in favour of a volunteer.
b. The requirement of Deed: in WALSH V LONSDALE, there was an agreement for a lease which
was above 3 years. At common law, a lease of above 3 years must be under deed. In this case, there was
no such deed. The court still held the contract to be valid and enforceable because equity sees as done
that which ought to be done.
c. Doctrine of Conversion: where a property is required to be converted from realty to personality,
equity deems it as so converted. See in FLETCHER V ARSHBURNER.

6. EQUITY LOOKS AT INTENT RATHER THAN FORM: while equity is interested in the
substance, common law is interested in the form.
Application of the Maxim
a. Contractual Obligation: At common law, time is of essence. At equity however, time is generally
not of essence. Where the time for performance of contract has passed, equity can still order for specific
performance. This is because; the intention of the parties was for the contract to be performed.
b. Mortgage: equity allows a mortgagor to redeem his mortgaged property even after the redemption
date has passed. This is because; the parties did not intend the transaction to be a sale but a mortgage.
Limitation of the Maxim
Equity regards time to be of essence in the following cases:
a. Where parties has expressly agreed that time should be of essence
b. Where there has been a notice by either parties as to time being essential
c. Where the subject matter of the contract requires that time should be of essence. eg. Contract for
perishable goods.

7. EQUITY ACTS IN PERSONAM: While common law acts in rem, equity is said to act in personam.
This means that equity is interested in the person while common law proceeds against the subject matter.
Though equity tried to adjust its position, it is still not enforceable against a bona fide purchaser for
value without notice.
Application of the Maxim
a. Committal to Prison: here, equity orders the defendant to be commuted to prison until he fulfills the
obligation required of him.
b. Writ of Sequestration: Here, the court of equity appoints a third person in charge of the defendant‘s
property until he performs the obligation so ordered.
c. Vesting Order: The court may transfer the defendant‘s property to another person and that other
person obtains a good title.

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d. Jurisdiction Abroad: The court can order the performance of an action against a person within its
jurisdiction for or against a subject matter outside its jurisdiction. See the case of PENN V
BALTIMORE, AYINULE V ABIMBOLA.

8. EQUITY FOLLOWS THE LAW (BUT NOT SHEEPISHLY OR SLAVISHLY): This means that
equity generally follows the common law rules. However, where following the common law rule will
lead to injustice, equity was ever ready to depart from the law.
Application of the Maxim
a. Contract: equity follows the common law rules of contract: offer, acceptance, consideration,
contractual capacity, privity of contract, etc.
b. Primogeniture Rule: equity follows the common law rule of primogeniture, where the eldest son
inherits the property of his deceased father who dies intestate. However, where the first son promises the
father that he would take care of his siblings, and the father as a result did not make a will, equity will
deviate from the primogeniture rule and holds the first son bound by his words. See in STRICKLAND
V ALDRIDGE.
c. Trust: equity just as common law sees the trustee as the legal owner of a trust property. Equity
however went further to recognize the interest of the beneficiary.
d. Express Statutory Limitation: equity follows the common law rule of statutory limitation. Where a
statute provides a time frame for institution of an action, failure to institute such action within the time
frame renders the action statute barred.
e. Limitation by Analogy: where a subject matter is analogous to that which has an express statutory
limitation, equity also follows the common law rule to bar a party coming outside the time frame so
prescribed.
f. Creation of Estate: equity follows the common law rule of fee simple, fee tail and life estate.
However, for equity, the precise words of limitation must not be employed. Any words which suggest
that a particular interest is that which is intended to be created shall suffice.
Exceptions to the Maxim
Equity shall not allow a statute to be used as an engine of fraud. This is applicable where there is a
concealed fraud, part performance and secret trust. For a concealed fraud, time begins to count at the
time when the concealed fraud is discovered.
Also where there is a secret trust, the time for the beneficiary to bring an action against a trustee starts to
count when the beneficiary discovers the existence of a secret trust in his favour.
And for part performance, where a contact is by statute required to be in writing but the requirement of
writing is not complied with, equity will still enforce the contract as long as there is a consideration, if
there has been a part performance by the other party. This is because, that party has shifted his position.

9. DELAY DEFEATS EQUITY

Equity aids the vigilant and not the indolent.
Application of the Maxim
a. Express Statutory Limitation: where a statute provides for a limitation period by which an action n
respect of a subject matter can be instituted, institution of the action later than the prescribed time frame
renders the action fatal.
b. Limitation by Analogy: where a claim is not expressly covered by a statutory limitation, but it is
analogous (similar) to a claim expressly covered, equity will apply that statutory provision by analogy.

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c. Claims outside Statute: This is where doctrine of laches comes in. Here, the claims are neither
covered expressly by statute nor by analogy. The court of equity still will not avail a person who brought
an action after an unreasonable delay.
For doctrine of laches to apply, it must be shown that the plaintiff had knowledge of the existence of his
right which was inconsistent with that of the defendant, and must have encouraged the defendant to
make expenditures in respect of the subject matter in issue.
Limitations to the Maxim
Delay will not defeat equity where there is a concealed fraud, secret trust and disability.

10. EQUITY IMPUTES AN INTENTION TO FULFIL AN OBLIGATION: Where a person is

placed under an obligation to perform a certain act and he goes on to perform another task which is
similar to that originally contemplated, equity will impute that act to be the performance of the
obligation so contemplated.
Application of this maxim is seen in the doctrines of performance and satisfaction.
(A) WHERE THE EQUITIES ARE EQUAL, THE FIRST IN TIME SHALL PREVAIL
(B) WHERE THERE ARE EQUAL EQUITIES, THE LAW SHALL PREVAIL
The above two maxims are employed to determine the priority of interests where there exist competing
interest between two equities of the same juridical rank (equitable/equitable) and two equities of
different juridical rank (equitable/legal), respectively.
Where the competing interests are equitable/equitable, the first in time shall prevail in equity only if the
conduct of the first interest is unimpeachable.
Where the competing interests are equitable/legal, the law shall only prevail if the holder of the legal
interest is a bona fide purchaser for value without notice of the prior existing interest.
The doctrine of temporal order rule and the doctrine of bona fide purchaser for value without notice are
employed in handing these issues of priorities.
These last two maxims shall be discussed in details in our later article, for the purpose of information
and clarity.

Conclusion
Equity employed these maxims in order to justify the basis of its deviations from certain common law
rules. Moreover, where there is conflict between common law and equity, equity prevails. This very
principle made it feasible for equity to have its way in its effort in ameliorating the hardship of common
law. Otherwise, the impact of these maxims may not have been possible. The maxims also made visible
the considerable changes made by the court of equity. Common law was indeed harsh. Thanks to equity.
The Nature and Use of Maxims
The major equitable maxims would come to embody one or more of four varying aspirations:[23]
1. Fairness and morality; e.g., ―He who seeks equity must do equity;‖[24] ―Equity will undo what
fraud has done;‖[25] and ―Equity delights in equality.‖[26]
2. Preservation of equity’s discretionary nature; e.g., ―Equity enforces what good reason and good
conscience require.‖[27]
3. Keeping equitable remedies unique to when legal remedies prove inadequate; e.g., ―Equity
follows the law‖[28] and ―Where there is equal equity the law must prevail.‖[29]
4. Judicial efficiency; e.g., ―Equity delights to do complete justice, and not by halves‖[30] and the
charming ―Equity does not stoop to pick up pins.‖[31]

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Like case law, maxims‘ applicability to the dispute at bar can be debated, but not their institutional
authority and abstract rationality. As commanded by the maxim on maxims: ―Principia probant, non
probantur (Maxims have an inherent probative force, and need not be proved).‖[32]
Justice Joseph Story (1775-1845). He championed the study of the “science” of equity, including its
maxims.
Moreover, unlike an isolated, individual case precedent, a maxim has the force of the legions of cases
from which it has been forged, tested and repeatedly found true. Of course, all legal principles have
limits. For instance, use of an equitable maxim ―must comport to and remain compatible with the
prevailing legislative intent.‖[33]
Maxims are indispensable in the lawyer‘s toolbox, particularly when it is the only tool one has. As
Justice Scalia advised about their handy lifejacket utility:
A naked appeal to fairness in the face of seemingly contrary authority isn‘t likely to succeed.
Whenever possible, dress up the appeal with citation of some venerable legal maxim that supports your
point. Such maxims are numerous, mostly derived from equity practice …. [Y]ou can almost always
find one to support a defensible position.[34]

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