Lecture 3

Equitable Remedies
BY : UZA. HAWWA SHAZNA AHMED
2023 / FSL / VILLA COLLEGE
 Equitable Remedies
◦ Remedies granted by Equity to redress wrong.

◦ Case: Lamare v Dixon

◦ Generally given entirely at the court’s discretion.

◦ Equitable Remedies are designed to be Ancillary to common

Law Remedies; to supplement the common Law and invoked
only where the common Law remedy is so inadequate as to
warrant their application.
◦ It acts in personam and failure to comply: Contempt of Court.

◦ Equitable remedies can be varied or dissolved if the court

discovers later that the application for such relief was made
on suppressed facts or the facts upon which the order was
granted no longer exist.

◦ Case: Gilligan v National Bank Ltd.

◦ A remarkable feature over the centuries was the ability and

willingness of equity to grant elastic remedies which were not
obtainable a law.
 Remedies

RESCISSION RECTIFICATION SPECIFIC INJUNCTION TRACING

PERFORMANCE
RESCISSION
 Rescission
◦ Rescission is an equitable remedy used to set aside contracts
and to restore the parties to the positions which they had
occupied previously.

◦ In case the parties want to change the whole contract, it

cannot be rectified but parties can rescind the contract.

◦ By rescinding, the parties will be sent back to their original

positions (Contract set aside and restore to the former
position as if there is no contract between the parties.
◦ Rescission is distinguished from the contracts which are void
ab initio (e.g., illegal contracts). And on the other hand, from
contracts with no inherent invalidity which are subsequently
discharged by breach.

◦ The role of the equity is first, that equity must set aside a
contract in circumstances where the common law would not;
secondly, that equity is more flexible in its view of restituto in
integrum, and can affect what is necessary, for e.g., by
ordering accounts and enquiries.
◦ Thirdly, the equity can grant relief on terms, by applying the
maxim “he who comes to equity must do equity”.

◦ The party rescinding is entitled to be restored to the position

he would have been in had that contract not been entered.

◦ The party rescinding the contract cannot recover damages as

that would put him in the position, he would have been on had
the contract been performed (Redgrave v. Hurd (1881)).
Grounds for Rescission

◦ Mistake

◦ Misrepresentation

◦ Undue influence

◦ Unconscionable Bargain
 Loss of right to Rescind
◦ Formerly a contract entered in reliance upon an innocent
misrepresentation could not be rescinded after execution of
the contract by the transfer of property under it.

◦ This rule was abrogated by the Misrepresentation Act 1967,

s.1. However, the court has discretion under section 2 (2) to
award damages in lieu of rescission in any case of innocent
misrepresentation if it be equitable to do so.
More generally, the right to rescind may be lost in any of three ways:

1) Affirmation

◦ Where the party entitled to rescind affirms the contract, for example
by taking a benefit under it, with knowledge of the facts giving rise
to the right to rescind and of his legal rights (Peyman v. Lanjani
(1985)), he will be taken to have waived that right (Clough v. London
and North Western Rail Co. (1871)).

◦ Affirmation maybe shown by words or acts, or may be indicated by

lapse of time, the remedy being subject to the doctrine of laches (Life
Association of Scotland v. Siddal (1861)).
More generally, the right to rescind may be lost in any of three ways:

2) Restituto in integrum (restored pre-contractual situation) not possible

◦ A contract will cease to be capable of rescission if the parties can no

longer be restored to their original position (Thorpe v. Fasey (1949)).
Any money paid or other property transferred under the contract
must be restored.

◦ Cheese v. Thomas (1994); the COA held that justice required each party
to be restored to his original position so far as possible; it would be
harsh to make the defendant stand all the loss.
More generally, the right to rescind may be lost in any of three ways:

3) Delay

Failed to apply for rescission on time, the remedy is subject to the

doctrine of laches (Life Association of Scotland v. Siddal (1861)).
More generally, the right to rescind may be lost in any of three ways:

4) Innocent third-party acquiring rights

◦ The right to rescind is lost if an innocent third party acquires an

interest under the contract for value before the claimant seeks to
set it aside.

◦ E.g., Goods passed to third party. It will be hardship to rescind the

contract.

◦ Bona fide or second buyer situation – no rescission

◦ There is no bar to rescission if the third party is a volunteer, such

as the defendant’s trustee in bankruptcy (Re Eastgate (1905)).
RECTIFICATION
 Rectification
◦ In situations where an instrument is not in accordance with
the intention of the contracting parties due to a common or
unilateral Mistake, the instrument may be corrected.

◦ Rectification is a discretionary equitable remedy whereby an

instrument which does not accord with the intentions of the
parties to it may be corrected.
◦ It operates an exception to Parol Evidence Rule which does not
allow which does not allow admissibility oral evidence or
altering a written instrument.

◦ Here, oral evidence is allowed to be admitted before the court

to prove that the instrument had wrongly recorded the details
intended.

◦ I.e.., if the detail of a land in a sale and purchase agreement is

wrongly stated, oral evidence may be tendered to prove the
intention of the parties on the actual property intended to be
in transaction.
◦ The party's nave a choice of either to rescind or rectify the
contract.

◦ Rectification order by the court has retrospective effect and it

is a judicial remedy.

– Needs court order.

 Nature of the Mistake

1) Common Mistake

◦ GR: Rectification requires a mistake common to both parties,

whereby the instrument records the agreement in a manner
contrary to both parties' intention.
2) Unilateral mistake.

◦ Mistake by one of the parties in regarding the details or terms

in an instrument.

◦ Rectification can only be granted if he can prove that the

mistake, he made was due to fraud by the other party or that
the mistake was known to the other party.
 Defenses
i. Bona fide purchaser for value without notice has acquired
interest under the Contract.

ii. Doctrine of laches will bar the claim.

iii. Frustration (the contract is no longer capable of being

performed)
 SPECIFIC
PERFORMANCE
 Specific Performance
◦ An order against a contracting party for him to carry out his
obligation under the contract

◦ S. 11 SRA: Granted only when damages is not an adequate

remedy, i.e., contracts for the sale of land: stock and shares:
rare chattels.

◦ S. 18 SRA: Damages may be awarded in substitution for, or

addition to, specific performance. Any person suing for
specific performance, or a contract may also ask for
compensation for its breach.
◦ Decree of the court directing that the contract shall be
performed specifically according to the terms.

◦ Where a contract is suitable for a decree of SP, the plaintiff

may commence proceedings as soon as the defendant refuse
performance, or the defendant breaches the contract when the
time for performance arrives.

◦ The elaborate provisions governing decree are enacted in the

Specific Relief Act 1950.
Nutbrown v Thornton
(1804) 10 Ves 159
◦ Specific performance was ordered of a
contract to supply machinery which
could not be readily obtained elsewhere.
Cohen v Roche [1927] 1
◦ The court refused specific performance
to a buyer of a set of Hepplewhite chairs
KB 169

saying that they were ‘ordinary articles

of commerce and of no special value or
interest’. Note: the buyer was
contracting with a view to resale and for
personal use.
Circumstances when SP can be Granted
◦ Provided in S. 11 of SRA 1950:

a) Performance of an act agreed to be done wholly or partly of a

Trust.

b) No standard to ascertain actual damage caused by the non-

performance of the Agreement.

c) Pecuniary Compensation not an adequate relief - depends

on the type of contract & based on the maxim equity follows
the law.
◦ S. 21(2) SRA 1950: SP may be refused where a contract has
been secured by unfair means or it would cause severe
hardship to the other side.

◦ If the defendant proves that hardship amounting to injustice

would be inflicted upon him or her by granting the SP, and
that it would not be reasonable to do so, SP may not be
granted by the court.

◦ If a person has acted against the part who breaches the

contract and obtained a remedy, he cannot seek for SP as
another remedy.
◦ See S. 27 (a)-(c) SRA 1950

i. Fraud or undue advantage and consideration is grossly

inadequate.

ii. Consent obtained via misrepresentation.

iii. Consent given under the influence of mistake of fact,

misapprehension or surprise.

iv. SP cannot be granted against these people to compel

performance of the Contract.
 Discretionary Remedy
◦ Granting of SP is at the judicial discretion of the court
◦ It is not a matter of right of parties to a Contract.
◦ It is at the discretion of the court whether to grant or to refuse
to grant SP.
◦ However, courts discretion is not arbitrary.
◦ It has to follow the guidelines given by the
◦ Case: Ganam d/o Rajamany.
◦ Court may even refuse to grant SP when compensation is not an
adequate Remedy
For whom Enforcement cannot be made
◦ 23 SRA 1950: A person who could not recover compensation
for its breach, i.e., third party who is not a privy to a Contract.
◦ A person who has become incapable performing, or violates,
any essential term or contract that on his part remains to be
performed - the party seeking or should be ready, willing and
able to perform his or her contractual obligations.
◦ A person who has already chosen his remedy and obtained
satisfaction for the alleged breach or contract.
◦ If a person has taken action against the party who breaches
the contract and obtained a remedy, he cannot seek for SP as
another remedy.
◦ A person who previous to a contract, had notice that a
settlement of the subject matter thereof had been made and
was in force.
INJUNCTION
 Injunction
◦ An injunction is an order by court to a party to do or retrain
from doing a particular act.

◦ An injunction is an equitable remedy in the form of a court

order, whereby a party is required to do, or to refrain from
doing, certain acts.
◦ The party that fails to adhere to the injunction faces civil or
criminal penalties and may have to pay damages or accept
sanctions for failing to follow the court's order.

◦ In some cases, breaches of injunctions are considered serious

criminal offenses that merit arrest and possible prison
sentences.
 Types of Injunction
1) Mandatory injunction.

◦ The mandatory injunction requires that the defendant take some

action. For example, where a defendant’s negligence has caused water
to leak onto another person’s property, the court may seek to order
that defendant to take some action which will stop the water leakage.

◦ One means of doing this would be by the way of mandatory injunction

to require the defendant to take action to mend the leak, as well as
other in respect of damages and so forth. A mandatory injunction
gives the court greater leeway to impose condition on its performance.
Kelsen v Imperial
◦ A mandatory injunction was granted to
Tobacco
enforce the removal of a sign which
trespassed in the air space above the
Claimants premises causing no real
damage to him.
Allen v Greenwood
◦ The plaintiff had used a greenhouse in
their garden for over 20 years. The
defendant had built a building so
obstructed the light to it. The plaintiff
brought as action for nuisance and for
injunctions. The court of appeal granted
a mandatory injunction.
2) Prohibitory Injunctions

◦ A prohibitory injunction is restrictive in nature, and it requires that

the defendant refrain from initiating or committing the prohibited
act. For instance, an injunction ordered to prevent the defendant from
building an extension will be prohibitory in nature

◦ Similarly in cases in which the defendant has trespassed on the

claimant’s property, actual loss need not be shown before an
injunction is granted. (Goodson v Richardson).

◦ An injunction may be granted even if nominal damages recoverable at

law. ( Rochdale Canal v King)
Sheppard and Short
◦ There may be cases in which injunction
will be refused. In Armstrong v Sheppard
and Short , where the C has misled the
court and suffered no damages the court
did not grant an injunction.
3) Injunction quia timet

◦ A quia timet injunction is one which is ordered to protect the applicant

from an action which it is feared may be committed in the future, on
the basis that some right of the applicant will otherwise be infringed.
Literally, the term ‘quia timet’ means ‘he who fears’, that is, he who
fears that he will suffer from harm.

◦ The quia timet injunction does not require that some right of the
applicant has been affected, only that there is a risk of its being
affected. Therefore, the grant of this type of injunctions is typically
limited situations in which there is a real risk of determent to the
applicant.
Graigola marthyr Co Ltd v
Swansea corporation ◦ It was held a mere vague apprehension is
not sufficient to support an action for a
quia timet injunction. There must be an
immediate threat to do something.’
◦ It must be demonstrated that the
respondent intends to, or is likely to,
participate in the act complained of.
Where the respondent demonstrates a
disinclination to participate in the action
then the injunction will not be granted.
4) Interim injunction (previously known as interlocutory Act injunction)

◦ The interim injunction is an injunction made during litigation, which is

binding on the parties only up to the date of final judgment.

◦ Example: Suppose that Ben, a member of a class of beneficiaries under a

discretionary trust, has commenced litigation against T, the trustee of that trust,
claiming that T has breached the terms of the trust by deciding to pay trust income
to other beneficiaries and wind up the trust. Ben will therefore be seeking a
declaration that the payments would be in breach of trust. However, in the
meantime, Ben will want to ensure that T does not make those payments before the
completion of the litigation. Therefore, Ben will seek an injunction against T which
will prevent T making any such payments before the litigation is completed. Such
an injunction, binding only up to date of judgment, would be an interim injunction.
Series 5 Software Ltd v
◦ The P were the owners of a soft ware.
The D was the P’s employees removed
the software, client lists, the accounts
Clarke

and equipment and resigned from the

company. P applied for an injunction.
The court held that having regard to the
adequacy of damages and the balance of
convenience it was inappropriate to
grant an injunction.
Douglas v Hello Ltd
◦ The balance of convenience was in the
D’s favor because the claimant’s loss
could be quantified if the injunction was
refused. Accordingly, the injunction
would be discharged.
5) Freezing Injunction (previously known as Mareva Injunction)

◦ A Mareva Injunction is used when it is anticipated that one party will

obtain judgment against another and the person who is likely to be
adversely effected attempts to remove assets from the jurisdiction
thereby negating the effect of any judgment obtained.
Mareva compania naviera
sa v international ◦ The balance of convenience was in the D’s
bulkcarriers favor because the claimant’s loss could be
The defendants chartered the plaintiff’s
ship, the Mareva, which it sub-chartered to
a third party. After having paid two
installments, the defendant defaulted in its
payment to the plaintiffs. The plaintiffs
obtained an injunction preventing the
defendant from disposing or removing any
of its moneys.
Mareva compania naviera
sa v international
bulkcarriers ◦ Held: (CA) where it appeared that a debt was
due and owning and there was a danger that
the defendant may dispose of its assets so as
to defeat the plaintiff’s claim, the count had
jurisdiction to grant an injunction to be
granted [1975] 2 Lloyd’s rep. 509
◦ if the injunction was refused. Accordingly,
the injunction would be discharged.
5) Search Order (previously known as Anton Pillar Order)

◦ It was to prevent the defendant from destroying anything that could

be used by the plaintiff in court to assist their trial.

◦ It is granted without the other party’s knowledge in order to

maintain the element of surprise.

◦ The order requires the defendant to allow the plaintiff or a

representative to enter his premises and to collect what is relevant
for evidence.
5) Search Order (previously known as Anton Pillar Order)

◦ If the defendant does not follow the order, then he shall be held in
contempt of court. It is only granted where it is deemed to be
absolutely necessary where it is feared that vital evidence will be
destroyed.

◦ The order takes its name from the 1976 Anton Piller KG v
Manufacturing Processes Ltd case
TRACING
 Tracing
◦ One of the most effective remedy available to a beneficiary
who has been deprived of the trust property as a result or
breach of trust by a trustee is the remedy of tracing.

◦ The remedy enables the beneficiary (plaintiff) to follow the

ownership of property into whosever hand's that property
falls and to recover it.

◦ A means to Trace the misappropriated property of Trust

Assets. It is a process of identifying new property as substitute
for the original property.
◦ Owners can recover the property, or any profits made from it,
or in any situations where the properties cannot be recovered
(it has been mixed), substitute property.

◦ A tracing remedy is a method of asserting ownership to

property.

◦ Literally, the legal or equitable owner property may "trace"

their ownership through the hands of the different persons
who may have possessed tr and may recover it from the
person who currently possesses it.
◦ Object of remedy: To restore to plaintiff that which they have
been deprived of wrongfully, often in Breach of Trust.

◦ Such is the power of tracing remedy that the property need

not be in the same form as that when they lost possession
because the claimant is tracing their right of ownership and
may enforce the right of ownership against any property
which has been exchanged for their original property.

◦ Case: Boscawen v Bajwa.

◦ Neither a claim nor a remedy, but a process.

Thank You! ☺
Any Questions?