KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY

FACULTY OF LAW
EQUITY AND SUCCESSION, 2015/2016 ACADEMIC YEAR

FIRST SEMESTER: PRINCIPLES OF EQUITY & TRUST

Course Code: Law 471:
Credit Points: Three (3)
Coordinators: Hansen K. Koduah
Apraku Nketiah (0208867226 Email: napraku@yahoo.co.uk)

Synopsis:
The principles of equity were originally developed to ameliorate the harshness of the Common
Law and have since become a fundamental component of our legal system. A knowledge and
comprehensive understanding of the major principles of equity are necessary to an
understanding of how the Ghanaian legal system operates; it is thereof incorporated in the LLB
degree.

Aims:
The aim of this course is to provide you with the coherent knowledge and understanding of
equitable principles and obligations duties, defences and remedies – as well as develop skills
relevant to ongoing learning and your future studies in law as well as your work in professional
legal practice. You will learn how to apply equitable principles in a real world context by
participating in a team legal exercise.

Objectives:
At the completion of this semester, you should be able to:
1. Apply your knowledge in major principles of equity to real problems and understanding
the underlying historical, social and policy rationale and how comparative and
international perspectives may impact on the development of equity as a component
of Ghanaian Common Law.

2. Critically analyze the manner in which the principles of equity have and should evolve
in response to changing social contexts.

3. Recognize and describe equity and ethical problems.

4. Identify, extract and evaluate equitable and ethical principles and policy and apply
these to resolve real world problems;

5. Communicate legal and policy arguments and solutions to legal problems clearly and
logically using the appropriate level and style.

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COURSE CONTENT:
* The nature and history of equity and its relationship with the Common Law;(Historical
Background, Origin, Nature and Development of Equity)

‘ Maxims of equity

* Fiduciary relationships and the ethical and the arising equitable obligations;

* Other equitable doctrines including the obligation of confidence, equitable estopple,

undue influence, unconscionable transactions, and relief against forfeiture of
proprietary interests;

+ The liability of third parties for breach of equitable obligations

- how express trusts are formed, varied and terminated
- implied and resulting trusts

* Equitable remedies including:

- specific performance
- account of profits
- injunction
- declaration relief
- Compensation
- equitable damages
- constructive trust

As you progress through the material you will be required to consider not only the substantive
law, but also the various historical, social economic, political and international factors which
have influence the manner in which the law of equity has developed and the way in which it
may develop in the future.

- In this course you will further develop the following skills: -

* Critical thinking and legal analysis
* problem solving
* oral and written communication;
* time management and teamwork; and
* ethical orientation

Approaches to teaching and learning.

There is a two-hour lecture time tabled for 13 weeks.

Nketiah Apraku
30th Agusust, 2015

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 KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY
FACULTY OF LAW
EQUITY AND SUCCESSION, 2015/2016 ACADEMIC YEAR

FIRST SEMESTER: PRINCIPLES OF EQUITY & TRUST I

READING LIST
I. Commentaries and Legislations

1. Kludze, Modern Principles of Equity, 2014 Edition

2. Hansbury and Maudsley, Modern Equity, 12th Ed by Jill E. Martin, Part IV
3. The Law of Trusts and Equitable Obligations, 4th Ed by Pearce and Stevens, Part I
4. The Sale of Goods Act, 1962 (Act 137) S. 58.
5. State Proceedings Act, 1961 (Act 51) ss. 13(2), 15(4).
6. Conveyancing Decree, 1973 (NRCD 175) SS. 1,2, 3.
7. Lands Registry Act, 1961 (Act 122)
8. Order 25 Rules 1 & 9 of C.I 47, 2004.
9. 1992 Constitution, Article 11(1) & (2)
10. Courts Act, 1993(Act 459) S. 54(1)
11. Mortgages Decree, 1972 (NRCD96) ss. 19 &20
12. Judicature Acts, 1873-75
13. Interpretation Act, 1960 (C.A.4)S. 17
14. L.K Agbosu, The Consequences of Land Registration {1986-88} 15 R.G.L. 226-
238.

II. Understanding Equity

1. Commission on Human Rights and Administrative Justice (No.1) v. AG [1998-
99]SCGLR 871
2. CHRAJ (NO.2) v. AG [1998-99] SCGLR 894
3. Central London Property Trust v. High Tree House Ltd. [1947] K.B 130; [1946] 1
All E.R 256
4. Adjei v. Foriwaa [1981]GLR 378
A. Customary Law
1. Sobotie v. Omabegho D.C (Land) 1952-55, p. 171.
2. Lartei v. Fio {1960} G.L.R. 119.
B. The Nature of Specific Performance
1. Penn v. Baltimore, 27 E.R. 1132.
2. Companhia de Mocambique v. British South Africa C., (1892) 2 Q.B. 358, C.A.
3. Busby v. Acquah (1954) 14 W.A.C.A. 574.
4. Bassil v. Honger (1954) 14 W.A.C.A. 569.
C. Part Performance
1. Walsh v. Lonsdale (18820 21 Ch. D. 9, C.A.
2. Maddison v. Alderson (1883) 8 App. Cas. 467, H.L.

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 3. Rawlinson v. Ames (1925) Ch. 96.
4. Kingswood Estates C. Ltd. V. Anderson (1962) 3 W.L.R. 1101; (1962) 3 All E.R
593.
5. Ahumah v. Akorli (No.2) (1975) 1G.L.R. 473.
6. Samarasinghe v. Sbaiti (1977) 2 G.L.R. 442, C.A.
7. Djan v, Owoo (1976) 2 G.L.R. 401.
8. Tekyi alias Mensah v. Ackon & Anorther [1980] G.L.R. 779.

D. Binding Contract: A pre-requisite for Specific Performance

1. Asare v. Antwi [1957] 1 G.L.R. 16.
2. Short v. Morris (1953) 3 W.A.L.R. 339.
3. Winney v. Manford & Others [1980] G.L.R. 494.
E. Volunteers
1. Jeffreys v. Jeffreys (1841) Cr. & Ph. 138; 41 E.R. 443.
F. Illegal & Immoral Contracts
1. Hope v. Hope 44 E.R. 572.
2. Ewing v. Osbaldiston, 40 E.R. 561.
G. Contracts of Service & of Personal Skills
1. Lumley v. Wagner, 42 E.R. 687.
2. Page One Records Case [1968] 1 W.L.R. 157; [1967] 3 All E.R. 822.
3. Vine v. National Dock Labour Board [1957] A.C. 488.
4. Owusu-Afriyie v. State Hotels Corporation [1976] 1 G.L.R. 247.
5. State Hotels Corporation v. Owusu-Afriyie [1977] 2 G.L.R. 488.
6. Republic v. Ghana Industrial Holding Corporation [1982-83] G.L.R .510
H. Adequacy of Damages at law
1. Hulton v. Walting [1948] Ch. 26.
2. Dominion Coal Company Ltd. V. Dominion Iron & Steel Company Ltd. [1909]
A.C 293 P.C.
3. Cohen v. Roche [1927] 1 K.B. 169.
4. British Bata Shoe Co. Ltd. V. Roura & Forgas Ltd. [1964] G.L.R. 190, S.C.

NB: Supplementary list of cases in respect of specific topics shall be furnished prior to
the treatment of the topic.

Apraku Nketiah
August 30, 2015

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 KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY
FACULTY OF LAW
EQUITY
LECTURE ONE
Philosophical ideas of equity
The following ideas come from Aristotle’s Ethics, and should be understood as considering the
difference between common law and equity:

“For equity, though superior to justice, is still just… justice and equity coincide, and although
both are good, equity is superior. What causes the difficulty is the fact that equity is just, but
not what is legally just: it is a rectification of legal justice.”

So it is that equity provides for a better form of justice than the common law because it
provides for a more specific judgment as to right and wrong in individual cases which rectifies
any errors of fairness which the common law would otherwise have made:

“The explanation of this is that all law is universal, and there are some things about which it is
not possible to pronounce rightly in general terms; therefore in cases where it is necessary to
make a general pronouncement, but impossible to do so rightly, the law takes account of the
majority of cases, though not unaware that in this way errors are made. … So when the law
states a general rule, and a case arises under this that is exceptional, then it is right, where the
legislator owing to the generality of his language has erred in not covering that case, to correct
the omission by a ruling such as the legislator himself would have given if he had been present
there, and as he would have enacted if he had been aware of the circumstances.”

Thus, equity exists to rectify what would otherwise be errors in the application of the common
law to factual situations in which the judges who developed common law principles or the
legislators who passed statutes could not have intended.

DEFINITION - Equity has two meanings:

It means fair or just in its broad and wider sense (See Psalm 96:10 NIV). Equity is an essential
and intrinsic part of the body of laws administered by our courts. Equity denotes fairness,
justice, good faith or that which is moral or ethical.

In its technical sense, it refers to the set of legal principles, rules and procedures, in
jurisdictions following the English Common Law tradition, that supplement strict rules of law
where their application would operate harshly.

A body of law consisting of rights and remedies which evolved historically through the Courts
of Chancery.

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Equity is commonly said to “mitigate the rigors of Common Law” allowing Courts to use their
discretion and apply justice and fairness in accordance with natural justice.

These two meanings of equity were conceptualized in the Ghanaian Legal Systems through the
Supreme Court Ordinance of 1876 of the then Gold Coast, usually referred to as the
“Reception Clause”

Section 14 of the Ordinance provides:

“The Common Law, the doctrines of equity and the statutes of general application which were
in force in England…shall be in force within the jurisdiction of the Court.

The Courts of Gold Coast were also to”

Observe and enforce the observance …such law or custom not repugnant to national justice,
equity and good conscience”

Legal rules v Equitable discretion

“Equity…corrected, supplemented and amended the common law. It softened and modified
many of the injustices of the common law, and provided remedies where at law they were
either inadequate or non-existent” – Meagher, Gummow & Lehane’s Equity Doctrines and
Remedies 4th ed 2002.

Aristotelian concept that equity is a correction of the law where it is defective owing to its
universality holds.

EMERGENCE OF EQUITY:

– Until the late 19th century there were two parallel systems of law operating in England, each
applying its own distinct rights and remedies.

Before 1066 all laws in England were local and enforced in manorial, shire and hundred Courts.

Under the Normans, Royal Courts began to emerge from the King’s Council (Curia Regis). This
did not take over the jurisdiction of the local courts immediately, but over a long period of
time the local courts lost jurisdiction over cases.

A practice was started of sending judges around the country to hold assizes (or sittings) to hear
cases. This enabled the judges, over a period of roughly 200 years to take the best local laws
and apply them throughout the land, thus creating law which was “common to the whole
country i. e. common law”.

The Kings Council had three functions of state”

Legislative

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Executive

Judiciary

Eventually, the court split off from the council and formed the main common law courts.

Court of Exchequer - Collection of revenues

Court of Kings Bench - Westminster Hall Settled disputes

Courts of Kings Bench

“Justice of Peace” (or Magistrates) originated from the Royal Proclamation of 1195 creating
“Knights of the Peace” to assist the Sheriff in enforcing the law.

Later they were given judicial functions and dealt with minor crimes.

The Common Law was successfully practiced over years (from 1066 – 1285) before identified
weaknesses eroded its smooth operation and procedures and some patent defects included:

The writ System

The doctrine of precedent

Defects in the Common Law

The Writ System

Before action could commence at any of the common law courts, there had to issue a writ by
the chancellor – (Secretary and keeper of the king’s Great Seal).

If the injured party was unable to fit his wrong in one of the available writs meant for specific
wrongs then his wrong could not be remedied (Provisions of Oxford – 1258)

The same consequence was meted out to those who chose wrong writs.

The Doctrine of Precedent

As the work of the Common Law Courts grew, the judges began to use previous decisions as a
guide for later cases.

Defects in the Common Law

Used of juries – intimidation and Control

One remedy - damages

Attention to formalities (rigidity)

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Lack of recognition of trust

EQUITY EMERGED

Petitioning the king – believed to be the fountain of justice for redress where parties were
aggrieved as a result of the defects or harshness of the Common Law.

Despite the development of the common law, justice remained a royal prerogative, and
therefore the king refrained a residuum of justice.

Initially, the King himself together with his council considered the petitions which became
constant practice until numerous petitions were lodged.

The king later adopted the practice of referring the petitions to the chancellor for
considerations.

The chancellor and his office clerks made verdicts in the name of the king and council until the
system got rooted in the administration of justice when the Chancellor was permitted to make
decrees/verdicts on his own authority.

At this stage, a litigant dissatisfied with a result obtainable from a court of law could appeal to
the chancellor, who acted as the King’s deputy, for relief on grounds of natural justice and
fairness in accordance with the judgment of the chancellor.

In the course of time, however, rules grew up to govern the chancellor’s discretion and by the
15th century the system of equity had fairly developed and was operating side by side with the
common law.

DEVELOPMENT OF EQUITY

No writ, juries and latin

Questions of facts and not law

Chancellors were ecclesiastics

Equity acts in personam (on the conscience of the defendant and not with rules)

Satisfactory remedies

New rights – trust system, mortgage redemption

EQUITY AND THE COMMON LAW

Distinguish between equity’s exclusive jurisdiction and auxiliary jurisdiction

Exclusive Jurisdiction

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Equity recognized and enforces new rights which the common law did not observe. Example
church matter – marriage, death and oaths and in modern times matters relating to breach of
confidence and trusts.

Concurrent Jurisdiction
The grant of remedies which the common law had alternatives –supplementing the common
law. (eg equitable remedies in matters of contract, equitable property interests). Equity is
“tapping the common law on the shoulder”

Auxiliary Jurisdiction
Under this jurisdiction equity did not deal with cases itself; it merely assisted the Common Law
Courts to do justice. Common law did not have the power to compel witnesses or order
discovery of documents. Thus if a vital witness in a case at the common law court refused to
appear or a vital document in the possession of one of the parties who was unwilling to bring it
to court, the common law courts were helpless and would decide the case only on the
evidence available to them in spite of the missing of the vital evidence kept away from the
court. In such a case the party concerned would apply to the court of Chancery for an order to
compel the appearance of the witness or the discovery of the document and this aided the
common law court to obtain all the evidence required in order to arrive at a just decision.

THE RIVALRY BETWEEN THE TWO COURTS

Until the late 19th century the courts of law and equity were completely separate. Since equity
represented an attempt to rectify deficiencies in the law there were many instances of direct
conflict between legal and equitable rules.

Chancellors who were hitherto ecclesiastics were replaced with seasoned lawyers and
consequently the system of equity became rigid and based on rules and precedents rather
than an individual conscience.

Note:

The Earl of Oxford’s case (1615) 1 Ch. Rep 1

Equity provides discretionary relief from various forms of oppression or injustice, including
harsh or unjust judgments in the common law courts.

Lord Ellesmere:

The reason why there is a court of equity is because men’s actions are so diverse and infinite.
It is important to make any general law which can be properly applicable to every particular
action and not fail in some circumstances. The purpose of equity is to correct men’s
consciences for frauds, breach of trusts, wrongs and oppressions, and to soften and mollify the
extremity of the law.

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*James I took the side of the chancellor and decreed that equity should take precedence over
the common law.

- The decree of James I established the supremacy of equity over the common law.

THE PERSISTENT CRITICISM OF EQUITY

It leaves too much to judicial discretion. John Seldon, an eminent 17 th century jurist declared:
“Equity is a roguish thing; for law we have a measure, know what to trust to. Equity is
according to conscience of him that is Chancellor; and as that is larger or narrower, so is
equity. Equity varies like the Chancellor’s foot”. Equity varies with the length of the chancellor’s
foot.

As a reaction to these criticisms, Lord Eldon (Chancellor from 1801 – 1806) said: “It is my duty
to submit to the authority of those who have gone before me…I cannot agree that the
doctrines of this Court are to be changed by every succeeding judge. Nothing would inflict on
me greater pain than the recollection that I had done anything to justify the criticism that the
equity of this court varies like the Chancellor’s foot.”

To ameliorate the situation two statutes were enacted, namely, Common Law Procedure Act,
1854 and the Chancery Amendment Act, 1858. The Common Law Procedure Act gave the
Common Law courts a limited power to give equitable remedies and the Chancery
Amendment Act gave the Court of Chancery power to award damages in addition to or in
substitution for an injunction or a decree of specific performance.

RESOLUTION OF THE CONFLICT

1867 – Appointment of a Royal Commission on Judicature

Based on its report, the Supreme Court of judicature Act. 1873 – 1875 was promulgated.

The Act abolished the court of chancery and the common law courts and in their place one
High Court was set up.

For the sake of efficient discharge of business the High Court was organized into five Divisions,
namely, Chancery Division, King’s Bench Division, Common Pleas Division, Exchequer Division
and Probate, Divorce and Admiralty Division.

In 1881 the Divisions were reduced to the Chancery Division, the Queen’s Bench Division and
the Probate, Divorce and Admiralty Division after the Queen’s Bench Division, the Common
Pleas Division and the Exchequer Division were merged into the Queen’s Bench Division. In
1972 the Probate, Divorce and Admiralty Division was renamed The Family Division.

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EFFECT OF THE JUDICATURE ACTS

Provided that in all divisions, law and equity should be administered together.

Provided that in all matters in which there was any conflict or variance between the rules of
equity and the rules of common law, the rules of equity should prevail.

Ashburner has said in his “Principles of Equity (1902) p.23 “the two streams of jurisdiction,
though they run in the same channel, run side by side and do not mingle their waters”

Hence the judicature system has two essential and conceptually distinct effects.

* It fuses the procedures of the old common law and equity jurisdictions.

* It embodies in statutory mandate the supremacy of equity or remedy (or a defendant a

defence) which he lacked under the old system. The same result will occur now, but without
the passages from one court or another.

THE DOCTRINE IN WALSH v. LONSDALE (1882) 21 CH. D9

* This developed to resolve problems of tenancies, where writing requirements and

formalities made a lease void or unenforceable at common law.

* Facts: A landlord granted a seven year lease of a mill to a tenant. The lease was not
under seal and was therefore void at law. After the tenant had gone into possession, the
landlord demanded pursuant to terms of the written lease, a years’ rent payable in advance.
The tenant refused to pay the rent demanded. The landlord detained the tenant’s goods and
the tenant sued for damages for wrongfully distress. The tenant argued that he was merely a
tenant from year to year, in possession without a lease, with rent payable quarterly, not in
advance.

* It was held that the distress was NOT unlawful. The court held that equity prevails and
ordered specific enforcement of the lease (the tenant had to pay the rent in advance).

* if a person goes in and occupies property as a tenant under an agreement, it is taken as

if an instrument giving effect to the new tenancy on the agreed terms has been executed’

(This is a valid equitable lease)

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* However, an equitable lease is not a legal lease.

- See Chan v. Cresdon. “An equitable right is not equivalent to a legal right; between the
contracting parties, an agreement for a lease may be as good as a lease. But, if you introduce a
third party, then you will see the difference”.

Example:

* A landlord and tenant execute an agreement that the landlord will grant a lease over
the landlord’s property to the tenant, for a term exceeding 3 years. No lease is ever registered.

- The terms of the lease agreement are binding on the landlord and tenant (there is a valid
equitable lease) – doctrine in Walsh v. Lonsdale.

- if a guarantor has guaranteed the tenan’ts obligations under the lease, the guarantor is not
bound by the guarantee – Chan v Cresdon.

* In Chan v Cresdon, the guarantor only guaranteed a registered lease. Since the lease
was unregistered, the guarantor was not obligated to discharge the tenant’s obligations.

The “Fusion Fallacy

The issue is whether the Judicature Legislation fused Equity and the Common Law, so that
equitable and common law principles are merged.

The authorities say “NO”

However, see United Scientific Holdings Ltd. V Burnley Borough Council (1978) A.C. 904 (H.L),
@925, per L. Diplock

Lord Diplock said that ProF. Ashburners’s metaphor had become “mischievous and deceptive”

He added:

“As at the confluence of the Rhone and Saone, it may be possible for a short distance to
discern the source from which each part of the combined stream came, but there comes a
point at which this ceases to be possible. If Prof. Ashburner’s fluvial metaphor is to be retained
at all, the waters of the confluent streams of laws and equity have surely mingled now”.

10. RECEPTION OF EQUITY INTO GHANA

Reception Clause of the Supreme Court Ordinance, 1876 provides:

“the Common Law, the doctrines of equity, and the statues of general application which were
in force in England on 24th July, 1874, shall be in force within the jurisdiction of the court”.

This provision received the technical equity developed in England but not the Supreme Court
of Judicature Act 1873, since the Act came into effect in 1875.

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Whether every court of Ghana is a court of common law and equity.
The position of the law in Ghana is well established that every court in Ghana is a court of both
common law and equity. As far back as 1976, the court of Appeal pronounced upon the
position of the law on the fusion of jurisdiction in law and equity, in the case of Bou-Chdid v
Yalley [1976] 2 GLR 258. As the learned Archer J.A. (as then was) pointedly expressed himself,
at page 264 of the law report:

“Notwithstanding the vicissitudes of the courts in Ghana since they were established about a
century ago, no one will venture to suggest that throughout this period separate courts have
administered the common law and equity in Ghana. It follows that the Plaintiff as an equitable
owner in possession can maintain an action in trespass at common law in any court of law in
Ghana.”

See: SOONBOON SEO V GATEWAY WORSHIP CENTER [2009] SCGLR 278 per Akuffo, JSC.

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