Paper on Equity and Trusts with Questions and Answers

Trusts
1. Compare and contrast the trust with the following
a) Agency
b) Debt
c) Power of appointment
d) Bailment
e) Contracts
Trusteeship involves onerous obligations, where a donor retains no responsibility for the
property once the gift has been made. Difficulty has been found in providing a
comprehensive definition of a trust but various authors have made attempts to define the term
trust.
A trust is a relationship which subsists when a person called the trustee is compelled by a
court of Equity to hold property, whether real or personal, and whether by legal or equitable
title for the benefit of some persons, of whom the trustee himself may be one and who are
called cestui que trust or beneficiaries, or for some object permitted by law; in such a way
that the real benefit of the property accrues not to the trustee, as such, but to the beneficiaries
or other objects of the trust.
Definition in Hague Convention on Law of Trusts:
This has been incorporated into English Law by the UK Recognition of Trusts Act 1987 and
under Article 2 of that convention, a trust is defined as follows:-
For the purpose of this convention, the word ‘trust’ refers to the legal relationships created
– inter vivos or on death – by a person, the settlor, when assets have been placed under
the control of a trustee for the benefit of a beneficiary or for a specified purpose.
A trust has the following characteristics—
(a) the assets constitute a separate fund and are not part of the trustee’s own
estate;
(b) title to the trust assets stands in the name of the trustee or in the name of
another person on behalf of the trustee;
(c) The trustee has the power and duty, in respect of which he is accountable, to
manage, employ or dispose of the assets in accordance with the terms of the trust and the
special duties imposed upon him by law.
A trust can be distinguished from other legal concepts such as bailment, agency, contract,
debts, conditions and charges, powers.

Trust & Agency

Agency is a contractual arrangement express or implied, written or verbal whereby one
person may act on behalf of another and bind that other as if he or she acted personally. An
agency arises where a person called the agent has expressed or implied authority to act on
behalf of another called the principal and he consents to do so. The agent is normally treated
as an accounting fiduciary party and he binds the principal vis-à-vis third parties. Royal
Brunei Airlines v Tan [1995] 2 AC 378 where a travel agent was appointed to sell tickets for
the plaintiff airline on condition that all monies received by the agent were to be held for the
airline on trust.
There are some similarities between trustees and agents;
-The relationship of trustee and beneficiary is fiduciary in nature while that of principle and
agent is normally fiduciary but not inevitably so.
-Both trustees and agents must act personally and should not delegate their duties
-Neither of them may make un-authorised profits from their office
There are differences however
1. The trustee in exercise of his office will contract as principal and cannot bind
the beneficiaries unless they have constituted him both trustee and agent but an agent
binds his principal so long as he acts on the principal’s authority or on the apparent or
ostensible authority that he is deemed to have.
2. Although the trustee has a right of re-coup an indemnity against the beneficiaries
for any properly incurred expenses and creditors may subrogate those rights in certain
circumstances there is therefore no direct contractual link between the beneficiary and
3rd parties comparable to the link between the principal and 3rd parties

3. Agency is normally terminated on death of either party and also by the

principal acting unilaterally if there is no contract to the contrary or the contract permits
him to do so. On the other hand a trust cannot be revoked unless the trust instrument
reserves the power of revocation. Mallot v. Wilson [1930] 2 Ch. 494.

However the beneficiaries if sui juris unanimous and together entitled may demand that the
trust property be distributed and consequently that the trust be brought to an end.

4. Normally the principal in agency gives binding directions to his agent

whereas beneficiaries cannot control the exercise of the trustee’s discretion. Refer to Re
Brockbank [1948]Ch. 206;

5. The central distinction between agency and trust is in relation to property. An

agent does not per se hold any property for his principal. Many agents do not obtain items
of property at all and those who do so acquire only possession but not title. On the other
hand there can be no trust unless title to the trust property vests in the trustee or in
another party on behalf of the trustee.
Trust and agency overlap
Note that trust and agency may overlap. A trust may be created under which the trustee
undertakes a contractual obligation to act on behalf of the beneficiary e.g. the vesting of
company shares in a nominee for a fee. Conversely an agent may become a trustee if for
instance he acquires title to property to be held for the benefit of his principal.

It has been said that an agent becomes a trustee for his principal if he obtains title to the
property for the principal’s benefit and on the face of if this is a clear proposition.
However this is not easy to gauge in practice especially if what is involved is a mere chattel
or money whose title may be transferred by mere delivery of possession with an intention to
transfer it. The question was tested in Cohen v. Cohen [1929]1 CLR in which a wife had
sued her estranged husband for several sums of money and the husband in defence pleaded
the statute of limitations her claims were time barred under the statutes of the Limitations
Act. The defence would succeed unless the claims arose under a trust or had been
acknowledged within the limitation period applicable to personal claims. The claims were as
follows: 9000 DM being money and the sale price of chattels sold on her behalf by an agent
in Germany. In order to overcome difficulties which attended transfer of funds from
Germany to England where she lived, the wife had arranged for her husband to collect her
9000 marks and use it for purchase of goods in Germany for his own business, it being agreed
that he would pay her out of his own funds in England.

The second claim was for £123 pounds sterling being the sale price of surplus furniture of the
wife sold after the marriage, the husband having retained this amount.
The third claim was as to £80 pounds sterling being settlement of an insurance claim arising
from the loss of the wife’s jewellery again the husband having retained this amount.
The court held that she succeeded in all the claims, the court finding that the husband stood
in a fiduciary relationship with regard to the wife’s property in the circumstances and was
therefore a trustee for her benefit. In arriving at this decision the court followed the decision
in Burdick v. Garrick 9000 DM (1870) L.R. 5 C.L 233 where Lord Justice Giffard stated as
follows:
“in respect of attorneys who had been authorised and buy property and had
attempted to set up the statute of limitations as a defence “there was a very special power of
attorney under which the agents were authorised to receive and invest to buy real estate
otherwise to deal with the property but under no circumstances could the money be called
theirs.” Under no circumstances had they the right to apply the money to their own use or to
keep it otherwise than to a distinct and separate account throughout the whole of the time that
this agency lasted, the money was the money of the principal and not in any sense theirs.
Under these circumstances, I have no hesitation in saying that there was in the plainest
possible terms a direct trust created. I do not hesitate to say that where the duty of persons is
to receive property and to hold it for another and to keep it until it is called for, they cannot
discharge themselves from that trust by pleading lapse of time.”
A trust and a debt
The distinction between trust and debt is more difficult. The traditional view is that the
relationship between trustee and beneficiary is not one of debtor and creditor. In other words,
the trustee does not owe the value of the rights he holds to the beneficiaries. Take a simple
example. If I lend you £100, your obligation to repay me £100 will not be taken away if a
bolt of lightning immediately destroys the very banknotes I gave you. But if you hold £100
on trust for me, then destruction of the subject-matter of the trust by lightning (so long as it
was without fault on your part) will mean that your obligations to me are at an end; it is not
possible for me to bring an action against you, claiming that you owe me £100 (see Morley v
Morley (1678) 2 Cas Ch 2). Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC
567 created confusion in this area, holding that a borrower of money can be both a debtor and
trustee in respect of the same sum. That decision is, however, extremely controversial, and
has been recently reviewed in Twinsectra v Yardley [2002] UKHL 12 But though, under the
traditional view enunciated above, a trustee will not owe the value of the right held on trust,
this is not to say that a debt cannot form the subject-matter of a trust. When we talk of a trust
of a bank account, we mean nothing more than that the creditor’s right to sue is held on trust.

A debt may or may not be contractual and the duty of the debtor is to repay money to the
creditor. In contrast, the trust does not need to be contractual and the duty of a trustee is to
hold trust property for the beneficiary.
The obligation of a debtor is personal but a trust is proprietary.
A trustee should where possible use trust property in income bearing investment and account
to the beneficiary for income. In the case of a debtor, such an obligation is unnecessary
except in so far as provided for in agreements express or implied.
See Potters v loppert (1973) CH. 399
Furthermore if money borrowed is stolen from the borrower, he is still under obligation to
repay it. However within trusts, a trustee is not liable for the loss which is not attributed to his
negligence.
See Morley v Morley 22 ER 817 (1678) 2 CH.D.2
Further the words of an instrument may be employed in such a manner as to create both
personal and trust obligation thereby creating a situation where a debt and trust exist.
In Barclays Bank ltd v quitsclose investment ltd 1970 AC 567
In the above case Rolls Royce Razor ltd was highly indebted to Barclays bank and was in
need of 209,000 pounds to pay dividends which had been declared on its shares. The sum was
borrowed from Quitsclose under an arrangement whereby the loan was to be used for that
purpose. The money paid into a separate account at Barclays Bank which had notice of the
nature of the arrangement. Before dividends were paid, Rolls Razor went into liquidation.
The issue was whether the money on the account was owned by the beneficiary Rolls Razor,
in which case Barclays Bank claimed to set it off against the overdraft or whether Rolls Razor
had received the money as trustee and still held it in trust for Quitsclose. The House of
Lords unanimously held that the money had been received in trust to be applied for
payment of dividends that purpose having failed, the money was held in trust for Quitclose.
The fact that the transaction was a loan, recoverable by an action at law did not exclude the
implication of a trust. The legal and equitable rights of remedy could coexist; the bank having
notice of the trust could not retain the money against Quitclose.
A TRUST AND BAILMENT
Bailment refers to a relationship which arises where an owner of property gives permission
to another person to possess it. A bailment is a delivery of personal chattels to a bailee subject
to a condition that they be returned to the Bailor or be dealt with as the Bailor directs when
the purpose of the bailment has been carried out. There is an element of delivery in bailment.
Read part 9 of the contract Act No 7 of 2010.
Suppose that you are going abroad for a year. You may have a painting which you do not
want to leave in the house. You therefore hand it to a friend to look after during your absence.
This will probably amount to a bailment, though it could be a trust. Everything will depend
on the location of your title, your right to exclusive possession, of the painting.
If you vested it in a friend, then they will be a trustee of that right for you. If however, you
kept your right in yourself, handing over only the possession of the painting, the transactions
will be one of bailment, not trust. The difference between the two is crucial for a number of
reasons. One is this. If, in breach of instructions, your friend sold his title to the painting to an
innocent purchaser, it will matter a great deal whether you created a bailment or a trust. If
your friend was a bailee, then the purchaser will not acquire a title good against you and you
will be able to recover the painting’s value from the purchaser in an action in the tort of
conversion, no matter how innocent the purchaser may have been.
The basic rule is nemo dat quod habet (no one gives what he does not have), and since your
friend did not have your title to the painting, he could not transfer it to the purchaser.
But if your friend was a trustee, the position of the purchaser would be different; for now
your friend does have the right in question and so is capable of passing it on to third parties.
You, of course, have rights under the trust, but such rights are destroyed when the subject-
matter of the trust comes into the hands of an innocent purchaser of value. It suffices to note
that bailment is governed by common law. The position of a bailee is similar to that of a
trustee in the sense that both are ‘entrusted’ with another’s property. The Trustee’s duty to
take care of trust property is roughly comparable with the duty of a gratuitous bailee although
generally the trustee’s duties are more onerous. There are however differences
Bailment differs from a trust in the following ways:
(a) A bailee obtains only possession and what is referred to as special property in
the goods property while a trustee takes title to the trust property. As a consequence a
bailee cannot except in a sale in market overt by virtue of estoppel or under special
legislations such as the Factors Acts pass a title to the Chattels valid against the bailor
whereas a bona fide purchaser who purchases the legal estate from a Trustee for value
without notice of the trust acquires a good title;

(b) Bailment is a common law notion worked out in proceedings for common
law relief such as actions for conversion, detinue or breach of contract whereas the trust
relationship is purely equitable. In conversion, initial possession is lawful but later
converts the goods contrary to what the owner intended. Detinue is where the defendant is
unlawfully withholding the plaintiff’s goods with no good reason.

(c) Bailment applies only to personal chattels that are capable of delivery
whereas a trust may arise in respect of real or personal property and whether tangible
or intangible.

(d) A bailment is enforced by the bailor who is a party to the arrangement while
generally the trust is enforced by the beneficiary who is not a party to the trust
instrument.

-In bailment, there is no transfer of property from the bailer to the bailee, i.e from A to B
-Bailment duties are dependent on rules of common law and not equity.
-The duties of trustees under a trust are minimal in character compared to the duties that exist
in bailment.
-Bailment is restricted to chattels but a trust may exist for all types of property.
-Under bailment, the bailer can lose his legal ownership of the bailed property through any of
the ways by which legal owners lose rights; for example, Estoppel, however under a trust, the
beneficiary’s interest/title can only be defeated by transfer of legal title to a bonafide
purchaser for value without notice of the trust.
See Pilcher V Rawlins (1872) LR.7 Ch.APP. 259

Contracts
There is no clean division between contract and trust, though some judges have attempted
to draw one (e.g. as in re Cook [1965] Ch. 902). Indeed, there can be no hard and fast line
between contract and trust because contract is a source of rights while trust is a way of
holding rights. Indeed, many of the rights held in trust are born of contract. A simple example
will illustrate. Suppose I open a bank account and pay in £1,000. I have a right born of
contract that the bank repays me £1,000 on demand. If I then declare that I hold that right on
trust for my children, it is impossible to say that this is now a case of trust and not contract; in
truth, it is both.

A contract is a common law personal obligation resulting from an agreement between

parties. On the other hand, a trust is an equitable relation which can rise independently of
an agreement. However, there are situations when a distinction between the two is hard to
draw, for example;
Settlement and covenants to settle
Where property is vested in trustees on a settlement, it is held upon a trust on the settlement.
However if the property has not yet been transferred to the trustees but it is simply subject to
a consent to settle, the beneficiaries will only be able to enforce the consent if they have
given consideration. This is based on the principle that “equity will not assist a volunteer”
Power of Appointment
· Appointment. In trust law, "appointment" often has its everyday meaning. It is
common to talk of "the appointment of a trustee", for example. However, "appointment" also
has a technical trust law meaning, either:
o the act of appointing (i.e. giving) an asset from the trust to a beneficiary (usually where
there is some choice in the matter—such as in a discretionary trust); or
o the name of the document which gives effect to the appointment.
The trustee's right to do this, where it exists, is called a power of appointment. Sometimes, a
power of appointment is given to someone other than the trustee, such as the settlor, the
protector, or a beneficiary.

This refers to a power that is conferred upon a done to dispose of the donor’s property by
nominating and selecting one or more third-parties to receive it. The property may consist of
tangible items like cars, boats, house hold items, or it may consist of an intangible interest in
property such as the right to receive dividend income from stocks.
The distinction between trusts and powers of appointment is fundamental. A trustee
must do as the settler directs whereas powers of appointment are discretionary.
Further, the beneficiaries under a trust are owners in equity of the trust property. However,
the objects of powers of appointments are nothing unless and until the donor of the power
makes an appointment in favour of the donee. See Vesty v IRC (1980) AC 1148
Question Two
The application of the maxims of equity in Uganda
Equity is a body of rules of fairness or natural justice or public morality. Courts
administer justice by applying rules of fairness or principles of natural justice and not any
other law.
Equity is applicable to Uganda with reference to the judicature Act1[1] which states that, in
every case or matter before the high court, the rules of equity and rules of common law shall
be administered concurrently. The contract Act2[2] also preserves the rights of parties to a
contract both at law and in equity.
Equity therefore is law3[3], in the sense that its part of Uganda’s law with reference to the
magistrates court Act4[4], which provides that, in every civil cause or matter before a
magistrates court, law and equity shall be administered concurrently.
However in underlying the application of equity are certain maxims or principles
which guide the courts. These maxims not only help to explain the essence of equity but
indicate situations in which equitable rules would or wouldn’t be applied as well as the
relationship between law and equity5[5]. As such they act as rather general guidelines to a

1[1] SECTION 14 (4) CAP 13.

2[2] SECTION 3 CAP 75.

3[3] GLANVILLE WILLIAMS “learning the law “10 EDITION.PP 23.

4[4] SECTION 11 (1) CAP 16.

5[5] D.J D.BAKIBINGA, “equity and trust in Uganda ‘. PP 18.

court in reaching a decision6[6]. These maxims include, Equity looks at substance rather than
form, Equity looks at that as done which ought to be done, where equities are equal, the
first in time prevails, Delay defeats equities, Equity acts in personam, Equality is equity, he
who seeks equity must do equity, equity follows the law, equity won’t suffer a wrong
without a remedy, equity imputes an intention to fulfill an obligation, equity won’t allow a
trust to fail for a want of a trustee, equity won’t allow a statute to be used as a cloak for
fraud, equity wont complete an imperfect gift, equity wont aid a volunteer, equity will take
jurisdiction to avoid a multiplicity of suits, equity delights to do justice and not by halves,
equity doesn’t require an idle gesture, equity abhors a forfeiture.
It should be noted that not all the maxims are applicable to Uganda’s legal system,
however there are those which are applicable as discussed below;
1) Equity looks at the substance rather than the form
Equity developed with the aim of achieving justice rather than sticking to the forms. This
approach to technicalities has constitutional backing which requires courts to administer
justice without undue regard to technicalities7[7]. In applying this provision the supreme court
of Uganda, in Stephen Mabosi Vs Uganda Revenue Authority, held that a memorandum of
appeal which was filled out of time couldn’t be rejected because the appellant couldn’t file it
before obtaining the official record of proceedings from the high court which were released
after the 60 day period required for filing the memorandum of appeal had elapsed. This
maxim is intended to examine instances where equity has intervened to ensure that the
substance is upheld over formalities and this instances include; time clause, covenants,
mortgage, penalties, deeds and under instruments of possession where justice okello, in
jaffer Bros limited Vs Hajji Bagalaaliwo8[8], held that since the relevant letter was issued by
a competent authority there was valid repossession by the appellant, in essence court looked
at the substance of the action of the minister rather than the form of the instrument required
under the Expropriated properties Act.
2) Equity looks at that as done which ought to be done
This maxim is illustrated by the principle that an agreement for a lease is as a good as a lease,
this is further illustrated by a provision of the Registration of Titles Act9[9] where by in
breach of or non-observance of any of the covenant expressed in a lease or implied by law,
the lesser may exercise the right of re-entering the leased property this is because equity
treats an agreement as done since the parties had agreed and one had fulfilled the obligation
then its fair for the other to benefit the principal is followed in the case of serunjogi Vs
katabira,10[10] in this case by a memorandum of agreement it was dully signed by both
parties. The defendant sold to the plaintiff a piece of land and a house situated thereon, the
plaintiff paid the full price but the defendant neglected to transfer title and deliver up
possession to the plaintiff. The plaintiff sued and court held that equity treats an equitable
interest as if it were already conveyed hence the defendant was ordered to deliver up vacant
possession of the premises.

6[6] SNELL’S principles of equity 29th EDITION 1990 PP. 27.

7[7] ART 126(2)(e) 1995 constitution of Uganda

8[8] Civil appeal no. 43 1997(court of appeal of Uganda).

9[9] SECTION 130. CAP 230

10[10] [1988-90] HCB PP.148

 This maxim can also be seen in a situation were a contract to create a mortgage was
treated as a promise by the debtor to execute a legal mortgage when called upon to do so such
an agreement created an equitable mortgage as illustrated in Barclays bank Vs Gulu
millers11[11], where court held that under a doctrine of equity a deposit of title deeds by way
of security whether or not accompanied by a memorandum was equivalent to one agreement
to execute a legal mortgage and carried with it the entire remedies incidental to a legal
mortgage. Creation of an equitable mortgage by deposit of a certificate of title is provided for
under the Registration of Title’s Act12[12].
3) Where equities are equal the first in time prevails
The maxim deals with priority where there is a conflict between two competing equitable
interests in property because priority of time gives better equity. In Ndigejjerawa Vs Kizito
and Kubulwamwana13[13] court held that Kizito’s /Kubulwamwana’s equitable interests had
priority because it was created earlier than Ndigejjerawa’s interest. Court further stated that
the first in time rule only applies where equities are equal.
It should be note that in determining priorities between competing equitable interests the
doctrine of notice does not apply. In Uganda’s legal system the general law rules for
determining priorities are substantially different with respect to the land registered under The
Registration of Title Act.
However there situations where the courts do not apply the maxim for example in
situation where there are successive assignments or mortgages of equitable interest
4) Delay defeats equities/Doctrine of laches
The essence of the doctrine is that an equitable relief won’t be given if the applicant has
unduly delayed in bringing the action unlike adverse possession, the doctrine can only be
used as a defense against an action and not as a basis for establishment of a cause of action
thus where the land owner knows that his rights are being violated and he chooses to sit idly,
he is taken to have delayed in the violation and will be stopped from arguing otherwise, in
climatong Vs Olinga14[14] the applicant for a period of thirty years occupied and cultivated
the respondents land although the latter was aware of the intrusion, he made no attempt to
stop it or recover the land. High court held that the applicant had taken to long to enforce his
right. there is no fixed time for the doctrine to operate its up to the court to decide whether or
not in the circumstances of a particular case it considers that delay to ring an action was
unreasonable.
However the courts won’t apply the doctrine in situations which are governed by statutes
of limitations for example under The Limitation Act15[15], provides that no person shall make
an action to recover land after the expiration of twelve years from the date the cause of action
accrued to him, where fraud is alleged there is no limitation period16[16].

11[11] [1959]E.A PP. 540

12[12] SUPRA 9. SECTION 139

13[13] [1952-56] 7 ULR PP.31

14[14] [1985]H.C.B PP 86

15[15] SECTION 6,19,21 CAP.70.

16[16] Ibid. SECTION 20 (1)

 There are three basic defenses to the invocation of the doctrine of laches, where by courts
won’t permit delay so as to bar a claim and they include disability or infancy of the plaintiff,
fraud on the part of the defendant, ignorance of the facts on which the claim is based17[17]
5) Equity acts in personam
“In personam”, that is against the defendant personally for example beneficial interests are a
right in personam because like all equitable rights it was done or enforced in personam for a
trustee to observe a trust. Where one acquires an equitable interest then it’s enforceable
against the vendor thus in katarikawe Vs William katwiremu (deceased) and Oneziforo
Bakampata.Where court held that where the purchaser acquires an equitable interest in the
nature of right in personam its enforceable against the vendor only. This is further illustrated
in a situation where a defendant fails to comply with a decree of specific performance; the
court may appoint another person to execute the transfer in respect of the disputed
property18[18]. Alternatively, the courts may make a vesting order19[19]. The effect of this
court’s decision is to transfer property from one person to another without a formal
conveyance.
It should be noted that courts won’t apply the maxim in situation where a bonafide
purchaser for value of the legal estate without notice of an earlier equitable claim over the
subject property
6) Equality is equity
This maxim applies in three broad circumstances that is, the presumption of tenancy in
common severance of joint tenancies and the principle of equal divisions. In Uganda’s legal
system there is a presumption of tenancy in common since the basic rule is that equity
operates against joint tenancies hence a right of survivorship.
In relation to Uganda’s Succession Act20[20], equity operates against the right of
survivorship and presumes a tenancy in common because they share of the deceased tenant
passes to those who are entitled to his property under his will or under the rules of intestacy.
This is further illustrated by the Partnership Act21[21] which states that where there is no
basis for distributing property between two or more claimants the court may apply this
maxim to divide the property equally for example where a parent has died leaving many
children, the presumption inequity is that they should all share equally in the property.
7) Equity follows the law
According to the Judicature Act,22[22] provides that equity is based on the law. Equity has
adopted some of the rules of common law for example those affecting mistake that is under
mistake common law is rigid or at times harsh that’s why equity has attempted to temper the
unfairness in some areas by introducing certain remedies where the common law failed to
grant any, a leading example of an equitable remedy could be granted at common law is Solle
Vs Butcher .

17[17] Ibid SECTION 3,22,26

18[18] CIVIL PROCEDURE ACT CAP 65 SEC.53,Cvil Procedure Rules Order 19, rules 13

19[19] TRUSTEES ACT CAP. 142.SEC.40

20[20] CAP 139(AMENDMENT) DECREE NO 22.1972.

21[21] SECTION 28(1) CAP 86

22[22] Supra 2; SECTION 2

 The principle that only parties to a contract will be bound by that contract under the law of
contract is observed by a doctrine of equity for example special performance can’t be granted
where damages will provide adequate remedy, this is because equity follows the law and is
designed to supplement the grant of damages but not to override them like in contracts for
sale or lease of land or where chattels sold have a special beauty or interest specific
performance will be decreed
However if the common law rules are ancient or too rigid then equity won’t follow them
since it won’t promote fairness to the litigants.

8) He who comes to equity must come with clean hands

The plaintiff must approach the court free from any blame on his part because court wont
grant equitable relief to the plaintiff if there is any evidence of fraud, mistakes,
misrepresentation or illegality, thus in Katarikawe Vs Katwiremu where court held that if a
tenant is in breach of several terms of his agreement with the land owner then court wont
grant relief.
Also when certain transactions are illegal and one seeks to get an equitable relief out of
such a transaction for example under the Employment Act23[23] which provides that wages
can only be paid in local currency and not in kind and any agreement to such will be illegal,
null and void. However for the inequitable conduct to amount to un clean hands, it need not
be illegal strictly as required by law. Its sufficient if the conduct is un conscionable and
morally reprehensible and need not have been to the other party to the action.
9) Equity won’t suffer a wrong to be without a remedy.
Trusts exemplifies this maxim, equity enabled the beneficiary through the procedures of the
trust, to enforce obligations where no remedy at common law existed24[24]. That is the
beneficiary has no right at common law to have the terms of the trust enforced but our legal
system never the less requires the trustee to carry out those terms to prevent him or her to
commit what would be in effect wrong against that beneficiary.
Specific performance and injunctions constitute one of the chief ways in which equity
supplements the law by granting auxiliary or additional remedies where the common law
remedies where inadequate. The remedy will only be granted where it’s just and equitable to
do so having considered all the circumstances of the case for example it won’t be awarded in
contracts of every description but only where legal remedy is inadequate or defective that it
becomes necessary for equity to interfere like in the Sale Of Goods Act25[25], contracts for
sale of goods, damages may be a warded for failure to supply goods.
However there are situations where equity can’t provide a remedy for example in situations
of unfair trade competition or contracts involving personal services. In such situations, courts
may be unable to order specific performance even where damages are
inadequate26[26].therefore the maxim is subject to what is realistic, practicable and convenient
for the court.
10) Equity imputes an intention to fulfill an obligation

23[23] CAP 219 SECTION 30

24[24] Trustees Act, CAP 164, SECTION 55

25[25] CAP79, SECTION 52

26[26] D J BAKIBINGA, Law Of Contract In Uganda”(1996) pp 379

The doctrine of performance and satisfaction are based on this maxim because both doctrines
are based on intention, however in our legal system courts tend to rely more on the
presumptions as to the party’s intensions that is where a person who is under a duty to do an
act, does an act amounting to the performance of the duty, in equity he/ she will be deemed to
have executed the duty.
11) He who seeks equity must do equity
A person seeking an equitable remedy must him or herself act fairly, thus in case of Bank Of
Uganda Vs Hassan Bassajabalaba where court held that Bassajabalaba failed to act fairly
when he forged a court order so as to get back his land titles hence an equitable remedy
couldn’t be granted to him.
This maxim can be illustrated through the following arrangements that is, doctrine of
election, notice to redeem mortgage, consolidation of mortgage and illegal loans.
CONCLUSION
Basing on the above discussion, equity didn’t deny the existence of the legal right but it has
added something to it .Our legal system as a whole would have been un fair to justice if the
system of the common law hadn’t been supplemented by the system of equity

QUESTION 3: Compare and contrast the implied and resulting trusts with constructive
trusts. Clearly indicating whether such treatment is justified
Approach to the question.
1. Define a trust.
2. The recognized valid trusts.
3. Give the formalities of a trust.
4. Briefly mention about how a trust is created in the law of trusts.
5. Give the essentials of a trust.
6. Briefly mention the different types of trusts in the law of trusts.
7. Define implied, resulting and constructive trusts and discuss about them.
8. Compare implied and resulting trusts to a constructive trust.
9. Contrast implied and resulting trusts with the constructive trust.
10. In the conclusion show whether the treatment is justifiable.
A trust is a right, enforceable solely in equity, to the beneficial enjoyment of property to
which another person holds the legal title. This is also a property interest held by one person
(the trustee) at the request of another (the settlor) for the benefit of a third party.27[27]
Therefore under the law of trusts there is an order that is mainly characterized of the settlor
who is the owner or who is bequeathing, the trustee who holds the property on behalf of the
third party who is the beneficiary. This means that the beneficiary will be the owner of the
trust if the trustee executes it. However, the beneficiary’s interest in the trust can be bought or
sold off. The interest of the beneficiary will be lost if it is the bonafide purchaser for value
who takes the property.28[28]

For a trust to be valid there are different circumstances that are considered in the law of
trusts. These are, a trust must involve a specific property. This means that there has to be
something that the settlor is giving to the trustee who holds it on behalf of the beneficiary an

27[27] Bryan A. Garner, Black’s Law Dictionary 8th Edition. Page 1546

28[28] D.J Bakibinga, Equity and Trusts in Uganda. Page 106

example can be land. A trust must reflect the settlor’s intention. In Lord Walpole v Lord
Orford29[29], it was held that am implied trust can be upheld in respect of mutual wills if the
agreement on which the parties based on was certain. The case propounds the settlor’s intent
so that no conflicts arise in future. Thirdly, the trust must be created for a lawful purpose.
This can be portrayed in United States of America where a constructive trust is a remedy to
the plaintiff to prevent the unjust enrichment of the defendants.30[30]

A trust is divided into two main categories that is the private trust which deal between
individuals; and public or charitable trusts. A charitable trust is one which is created to
benefit a specific charity or charities; or the general public rather than a private individual or
entity.31[31]

A trust has two main formalities for creation a trust. These are Registration of Titles Act Cap
230 (R.T.A) and by will. A settlor may create a trust by manifesting an intention to create
it.32[32] However, under section 95 of the R.T.A, a creation of a trust must be evidenced by
a memorandum in writing signed by a party creating the trust this also seen in section 54.
Under by will, section 50 of the Succession Act can apply. It provides for the forms of
executing a will according to the following provisions if he is not a member of armed forces,
engaged in actual warfare, or a mariner at sea. The provision are (a), that the will shall be in
writing; (b) that it shall be signed at the foot and end, thereof by a testator or other person in
his presence and by his direction; and that the signature be acknowledged by atleast two
witnesses in writing in the presence of the testator. The formalities will be discussed in details
while comparing and contrasting the three trusts.

In the law of trust, a trust is created basing on the mainly four key issues. These are according
to minors, mental abnormality, married women and companies. However, these issues will be
propounded and discussed when dealing with the comparing of the implied and resulting
trusts with constructive trusts.

A trust is also composed of essentials under the law of trust. These have to be followed
during the creation of a trust by the parties to the trust that is the settlor, trustee and the
beneficiary. The essentials are certainty of words; certainty of the subject matter; certainty of
objects; and the effects of the uncertainty. The essentials will also be discussed in entirety
when drawing the comparison between implied and resulting trusts with constructive trusts
and the contrasts therein between the mentioned trusts.

The law of trust is comprised of various trusts which include vitiated trusts, charitable trusts
implied and resulting trusts, and constructive trusts.
An implied trust is one which the courts deduce from the conduct of the parties and
circumstances of the transaction.33[33] In Bannister v Bannister34[34], a clear explanation

29[29] (1717)3 Ves 402

30[30] D.J Bakibinga, Equity and Trusts in Uganda. Page 170

31[31] Bryan A. Garner, Black’s Law Dictionary 8th Edition. Page 1547

32[32] D.J Bakibinga, Equity and Trusts in Uganda. Page 116

33[33] Bryan A. Garner, Black’s Law Dictionary 8th Edition. Page 112
was given that this is where a person in return for a valuable consideration agrees to settle the
property for the benefit of another. If such a person does such an act, he or she becomes an
implied trustee of that property. Implied trusts are created where formalities for creation of
express trust are missing. Equity recognizes implied and resulting trusts so as to execute the
presumed intention of the testator thus the settlor. Another thing that is important is that
implied trusts are less common in expressed trusts. This trust discusses the presumption of
implied and resulting trusts; the presumption of advancement which entails purchase in the
name of the child, where a husband provides money to the wife, where a true purchaser
stands in loco parentis, mutual wills, joint purchase and joint mortgage and joint accounts of
the spouses then the restrictions on the application of presumption and lastly rebutting the
presumption.35[35]
Resulting trusts is a remedy imposed by equity when property is transferred under
circumstances suggesting that the transfer did not intend for the transferee to have the
beneficial interest in the property.36[36] This trust arises by operation of law and is
distinguishable from an implied trust which arises from “the effect of a rule of equity”.
However, implied and resulting trusts are treated as one since courts aim at giving effect to
the presumed intention of the parties. Thus distinction between the two is inappropriate.
Constructive trust is an equitable remedy that a court imposes against the one who has
obtained property by wrong doing.37[37] The word ‘constructive’ is derived from the verb
‘construe’ not from the verb ‘construct’.38[38] The courts came up with such a trust to
prevent unjust enrichment and also not to create a fiduciary relationship. A fiduciary
relationship is one which one person is under a duty to act for the benefit of another on
matters within the scope of the relationship.39[39] This relationship can be guardian and
ward, principal and agent. Constructive trusts are imposed by a court of Equity as a person
personal remedy.40[40] Therefore, if a person in a fiduciary relationship uses the property to
gain personal advantages he becomes a constructive trustee for the person who is deprived of
the profit. Constructive trusts look at41[41] the vendors in terms of the constructive trustee;
mortgagee as constructive trustee; stranger to trust as constructive trustee; agent as
constructive trustee; then the Re Vandervell’s trusts.42[42]

Implied and resulting trusts have a lot that they do share with the constructive trusts. This can
be portrayed through the various comparisons discussed. Implied and resulting trusts if
compared with the constructive trust, these trusts are all equitable remedies in the law of

34[34] [1948]2 ALL.L.R 133

35[35] D.J Bakibinga, Equity and Trusts in Uganda. Chapter 14

36[36] Bryan A. Garner, Black’s Law Dictionary 8th Edition. Page 1551

37[37] Bryan A. Garner, Black’s Law Dictionary 8th Edition. Page 1547

38[38] Austin W.Scott and William F.Fratcher, The Law of Trusts 4th Edition 1987. Page 462.4

39[39] Bryan A. Garner, Black’s Law Dictionary 8th Edition. Page 1315

40[40] Curzon.L, Equity and Trusts (Cavendish Publishing, 1995). Page 105

41[41] D.J Bakibinga, Equity and Trusts in Uganda. Chapter 15

42[42] (No.2) [1973]3 W.L.R 744

trusts. Thus drawing a similarity amongst the trusts. This can be deduced from their
definitions per the Black’s Law dictionary by Garner.
They are all awarded in the courts of equity thus making them to be given whenever the legal
remedies are not inadequate. This can also be elaborated more in Equity and Trusts by Prof.
Bakibinga page 170. Therefore, such treatment is justifiable since all both the remedies are
awarded to fill the loop holes of common law in terms of administering justice in society.
Implied and resulting trusts are similar to a constructive trust in the way that they all have the
same personalities who form up the trust arrangement in the law of trusts.43[43] In the
definition of a trust, the has to be a settlor who bequeaths the property or the trust, the trustee
to whom the property has been given by the settlor and becomes a legal owner who holds it
on behalf of the beneficiary who is an equitable owner. Those are the three parties that cut
across all the mentioned trusts thus drawing a similarity amongst the trusts. However, for the
trust arrangement to be complete, the trustee executes the trust thus making the property pass
onto the beneficiary.44[44] Such treatment is justifiable in the way that there is a purpose that
is to pass on property by the trustee thus completing the trust arrangement and fulfilling the
intention of the settlor. In Kekewich v Manning45[45], a testator bequeathed residuary
personally to his wife and the remainder to the daughter. In that case, the testator’s intention
was pass on property to wife and the rest to daughter which was affected since the daughter
signed the whole of her interests to the trustees for the benefit of her nieces. It was held that
the trust was valid she had all the powers to divest her interest which was equitable.

Another comparison that cuts across the mentioned trusts is that they do share the same
criteria when a trust is to be created. These mainly concern about minors, mental
abnormality, married women and companies. Minors are those below the age of 18
years46[46] there are taken not to hold legal estate, settlement of trust.47[47] Therefore, a
settlement of a trust by a minor is voidable and he can repudiate it if he attains the majority
age and within a reasonable time.48[48] The rule is that a person with a mental problem
cannot create a trust. Section 50(1)(b)(ii)49[49] provides that a court may direct a settlement
of a trust by a lunatic as expedient. Women can now create trusts unlike the old days where
women were not regarded as less important to society thus the husbands could even hold
property on their behalf. Article 3350[50] today provides for the rights of women. This is
more evident in subsection (2) where women are given power to realize their full potential
and advancement. In brief, trading companies under section 8951[51] debenture and

43[43] Bryan A. Garner, Black’s Law Dictionary 8th Edition. Page 1546

44[44] D.J Bakibinga, Equity and Trusts in Uganda. Page 120

45[45] (1851)1 De GM&G.176

46[46] The Constitution of the Repulic of Uganda 1995 (as amended)

47[47] D.J Bakibinga, Equity and Trusts in Uganda. Page 115

48[48] Edward v Carter [1893] AC 360

49[49] Trustees Act Cap 64

50[50] The Constitution of the Repulic of Uganda 1995 (as amended)

51[51] Companies Act Cap 110

shareholders do have a right to inspect the register of debenture holders and have copies of a
trust deed. Thus any company which is registered under the Companies Act can fall in the
arrangement of the trust thus being a settlor, a trustee or a beneficiary. The treatment is
justifiable because it does protect the parties not to be affected by the executions made which
are against the law.

Implied and resulting trusts are similar to the constructive trust in the way that they all do
have a certainty of subject matter. This means that the settlor has something that he gives to
the trustee to hold as a trust for the beneficiary. Without the subject matter, there can never be
a trust of any kind. A subject matter may be land, chattels, money, or choses in action. In Re
Diggles,52[52] it was portrayed that uncertainty of a subject matter will adversely affect the
creation of a trust. Thus the treatment is justifiable because there is minimize of difficulties in
settling the trust.
Implied and resulting trusts are in another away similar to constructive trusts because
certainty of objects is required.53[53] Certainty of objects includes the recipients or the
purpose of the gift should be identifiable and the interest should be discoverable. This means
that the gift or the property should be certain thus being capable of identifying it and it should
be discoverable that is it can be traced from the settlor to the trustee and lastly to the
beneficiary or beneficiaries. The beneficiaries must therefore be ascertainable within the
period of perpetuity.54[54] Such treatment is justified since it helps the flow of the
arrangement of the trust order thus from the settlor to the trustee then the beneficiary. This
does not arouse confusion and minimizes mistakes say to give a trust property to a wrong
person since the property is easily ascertained and can be traceable.

The implied and resulting trusts are similar to a constructive trust in the way they do deal in
mortgages. This may however differ in the mode of operation but they share an area in the
law of real property which deals with mortgages. Implied trust deals with joint mortgages
while the constructive trust deals with the mortgagee as a constructive trustee. The operation
is different but the two trusts deal with the law of real property concerning mortgages which
is a comparison.

Although the implied and resulting trusts do share some similarities with the constructive
trust, there are some differences that contrast the mentioned trusts in the law of trust. These
are discussed as follows. Implied and resulting trusts do cover a wider coverage in terms of
the law trust is concerned well as a constructive trust covers a smaller scope. This is
evidenced where in contrastive trust is imposed against one who has obtained property by
wrong doing yet implied trust is one which results from the deduced conduct of the parties
and circumstances of the transaction. The difference is that under implied trusts there is no
immediate person to refer to yet under constructive it is that person who obtained the
property by wrong doing.

52[52] (1888)39 Ch.D 253

53[53] D.J Bakibinga, Equity and Trusts in Uganda. Page 133

54[54] D.J Bakibinga, Equity and Trusts in Uganda. Page 133

The implied trust is created where formalities for the creation of an express trust are
absent.55[55] Therefore, for the court to conclude that there was an implied trust it will look
at the conduct of the parties and the circumstances of the transactions. A constructive trust in
contrast is one which is imposed by the court. Therefore it is not does not arise from the
operation of law or even acts of parties.56[56] Thus one is a constructive trustee when he is
pronounced by court.
Implied and resulting trusts are executed on the presumption of the intention of the testator.
Therefore the intention of the testator or the settlor is important. In contrast, a constructive
trust is imposed on the parties by court regardless their intention.57[57] In Re Diggles supra,
the intention of the parties was shown when the husband and the wife agreed upon joint
ownership of property and the last to die will take the property hence a doctrine survivorship.
In that case an implied and resulting trust arise but not a constructive trust since no intentions
are required.

A constructive trust creates no fiduciary relationship. Fiduciary relationship is one in which

one party is under a duty to act for the benefit of another on matters within a scope of the
relationship for example a principal and an agent.58[58] This is why constructive trust arises
where a person uses fiduciary relationship to gain personal advantages. In Reading v
A.G59[59]a soldier serving in Egypt who was supposed to accompany criminal vehicles
while in his uniform assisted criminals to smuggle drugs into Cairo. The Crown seized his
money in his bank account. He brought a claim to retain his money but the House of Lords
held that “…as a result of a use of his uniform in breach of his duty to the crown could be
retained by the Crown…” thus a person who use the fiduciary relationship to enrich himself
he becomes a constructive trustee. However, in implied and resulting trusts the element of
fiduciary relationship arises. This means that there has to be a relation between the settlor and
the beneficiary. In Hussey v Paimer60[60],
an elderly widow went and lived with the daughter and son-in-law, however the
accommodation was limited. She paid for the construction costs following the arguments she
left the place and claimed for building costs. Per Lord Denning, he said “…By whatever
name is described, it is a trust imposed by law when justice and good conscience require it…I
have doubt that there was a resulting trust…” however, the major concern is that the relation
between the wife and the husband is evident with that of the widow, she was the mother of
the girl and mother-in-law of the man.

In conclusion, implied, resulting and constructive trusts are equitable remedies that are
awarded in the courts of Equity. They do have similarities but also differences. The
mentioned trusts were created to fill the gaps that common law remedies like probation, and
certiorari had left. According the above presentation, I do find such treatments as justifiable.

55[55] Philip Pettit, Equity and The Law of Trusts 8th Edition

56[56] Banister v Bannister [1948]2 ALL.L.R 133

57[57] Keeton and Sheridan , Law of Trusts 10th Edition 1974. Page 173

58[58] Bryan A. Garner, Black’s Law Dictionary 8th Edition. Page 1315

59[59] [1951] AC 507

60[60] [1972]1 W.L.R 1286

Reason being such remedies do prevent unjust enrichment thus depriving the beneficiary the
right of enjoyment of the property an example is the constructive trust. The implied and
resulting trusts help in the execution of the testator’s or settlors intention. Thus does being the
leading reasons for the implied and resulting trusts, in their nature, I do find them being
justifiable in the law of Equity and Trusts both at home and international at large.

Question 4
Question; Equity jurisdiction may be divided into three categories namely, Exclusive
jurisdiction, (creation of new rights), Concurrent jurisdiction (creation of new
remedies), axillary Jurisdiction (creation of new procedure). Examine the above
statement with the aid of relevant authorities.

ABSTRACT.
The question requires the appreciation of the definition of Equity, a detailed extract into in to
how Equity has evolved as regards the creation of new rights then show how Equity works
alongside common law that is concurrent Jurisdiction and the creation of new procedure, a
procedure to cure any absurdity created by common law then conclusion.
DEFINITION
Equity is the name given to the set of legal principles, in jurisdictions following the English
common law tradition, that supplement strict rules of law where their application would
operate harshly61[61] it refers to the right doing, good faith, honest and ethical dealings in
transactions or relationships between individuals62[62] however it is important that for Equity
to be enforced in court, there is need to understand its juristic concept in matters of
administration of law and justice by the judiciary. The juristic concept of Equity has by all
means bring out the idea of meeting the moral standards of Justice in any particular case and
at the same time there is need to take into consideration the common law, that is, there is need
to harmonize the two; Equity and common law.
HISTORICAL EVOLUTION OF EQUITY AND ITS RATIONALE
Equity arose and developed in the early days as a reaction to the rigors and inadequacies of
the common law. The inability of writs for some who needed them, the high costs, too many
procedural difficulties and the dominance of technicalities meant that common law was
losing touch with requirement of community63[63].Disappointed litigants began to petition the
king as the “Fountain of Justice” asking him to do justice in respect of some complaint, the
King with the Chancellor eventually set up a special court, court of chancery to deal with
these petitions. The Chancellor dealt with these petitions on the basis of what was morally
right not according to any precedent but according to the effect produced upon his own
individual sense of right or wrong by the merits of a particular case before him.64[64] In
Uganda, the Judicature Act65[65] states that the rules of Equity and the rules of common law
shall be administered concurrently and where there is a conflict or variance between the rules
of equity and the rules of common law with reference to the same subject the rules of equity
shall prevail.

61[61] www.wikipedia/Equity 2/25/2011

62[62] Equity and Trusts in Uganda page 1

63[63] Carson page 23

64[64] Law teacher/ Equity

65[65] Section 14 (2) (4) 1996

The Constitution of Uganda 199566[66] recognizes that in adjudicating cases both civil and
criminal in nature, the courts must take into consideration that substantive justice shall be
administered without undue regard to technicalities. That’s why in Stephen Mabosi V
Uganda Revenue Authority67[67] the Supreme court of Uganda held that a Memorandum of
Appeal which was filled out of time could not be rejected because the appellant could not file
it before obtaining the official record of proceeding from the High Court which were released
after the 60 day period required for filing the Memorandum of Appeal had elapsed. It’s
against this background that Equity developed with proper justification.
Equity jurisdiction is divided in to three categories; exclusive jurisdiction (creation of new
rights) that is common law courts had rights that they recognized and enforced but for their
inflexibility, Equity created new rights which included some of the following;
Trusts; these arise where one party gives property to trustees to hold for the use of
beneficiaries. A trust is an ownership structure, developed by courts of equity, which divides
legal and beneficial rights to an object of property among two separate entities. The cestui
que trust, or trustee, is said to hold legal title ‘on trust’ for the beneficiary, who holds
equitable (beneficial) title. There are several classes of trusts which include; Express trust
are inferred by law from unequal contributions made to a purchase price, subject to contrary
presumption or evidence of actual intention as to beneficial ownership, implied trusts which
the court deduces from the conduct of the parties and circumstances of the transaction.68[68]

Mortgagor's Equity of redemption. At common law, if the mortgagor had not repaid the
loan once the legal redemption date had passed, he would lose the property but remain liable
to repay the loan. Equity allowed him to keep the property if he repaid the loan with interest.
Thus this right to redeem the property is known as the equity of redemption. Equitable
mortgages are where a mortgagor who only has an equitable interest in a piece of property
can only create an equitable mortgage over it when he borrows money and uses that interest
as security. Similarly, a beneficiary under a trust can create an equitable mortgage over his
equitable interest under a trust if he uses it as security for a loan advanced to him.

Concurrent jurisdiction (creation of new remedies) depended on rights which

common law recognized and enforced. Initially the exercise of concurrent jurisdictions
depended on rights recognized and enforced by the common law, the problem being that the
remedies given by common law courts were inadequate. Equity intervened to provide
adequate and just remedies like specific performance, whose subject matter was unique,
injunction, and an order for an account. However there were conditions to grant the equitable
remedies and these still apply in Uganda today.
The decree of specific performance. The general rule of specific performance is
stated by Mukanza, Ag J69[69] that specific performance is not granted if the plaintiff would

66[66] Article 126(2)e

67[67] (1995) supreme court of Uganda (unreported)

68[68] D.J Bakibinga, EQUITY AND TRUSTS IN UGANDA, pg 112.

69[69]Haji Lutakome v Sentogo[1988-90] HCB 95

be adequately compensated by the common law remedy of damages .A decree of specific
performance is an order of the court compelling the defendant personally to do what he or she
promised to do. Thus, specific performance is the equitable right to the specific relief in
respect of an intermediate class of agreements which do not call for the execution of a further
instrument.70[70] In Beswick v Beswick 71[71]it was stated that the common law remedy may
be regarded as inadequate and specific performances may be available in an appropriate case,
where only damages can be recovered by an action of law.
Rescission. This is defined as the unmaking of a contract between parties. The equitable
remedy is concerned with the avoidance abinitio of agreements or other dispositions. It
requires a court order, and the court has discretion whether to grant it or not. In a situation
where the contract is voidable but not void, the contract remains valid but may be rescinded.
It arises where a contract is expressed by word or orally in an unequivocal manner that he or
she is no longer willing or that he or she refuses to be bound by the contract. This puts an end
to the contract and restores the parties as to the position they were in before the contract was
entered into. Instances recognized under this are those where the mistake is as to existence
of the subject matter, identity of subject matter, quality of the subject matter of the contract.
Also for the unilateral mistake where the party is mistaken as to whom he or she he
contracted with. In Cooper v Phibbs72[72] the appellant was a legal owner and trustee of land,
unknown to the other party was that the property belonged to them. The appellant renovated
the place and let it to the defendant. The defendant discovered it was their property and
wanted to set aside the contract. The House of Lords held that the contract should be set aside
subject to expenditure of the former. A contract is rescindable because such a mistake is
fundamental to render the contract void which may not be provided in common law however
equity resolves it.
Rectification. It is a remedy whereby court orders a change in a written document to
reflect what it ought to have said in the first pIace.73[73] Rectification may be used to rectify
documents which include conveyancing documents, building contracts, insurance policies,
bills of exchange and marriage settlements. Rectification is limited to the harmonization of
the written document with the intention of the parties. In Rose v Pim74[74], Denning LJ
stressed that it is necessary to show that the parties were in complete agreement on the terms
of other contract but by an error wrote them down wrongly. Then the concurrent intention of
the parties must remain unaltered up to the time of execution of the documents intended to
the effect of the antecedent agreement subject to the contract. On the contrary, where the
contract has been fully executed and nothing remains to be done under it, it will not be
rectified.75[75]
Injunction. An injunction is an order made to compel observance or performance of some
obligation. Section 3876[76]states that the High Court shall have power to grant an injunction

70[70]Philip H. Pettit, Equity and the Law of Trusts, 11th edition

71[71] (1962)2 ALLER 1197.

72[72][1867]L. R. 2 H.L 149

73[73] Bird, Roger; Osborn's Concise Law Dictionary, London, Sweet & Maxwell

74[74] Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd [1953] 2 QB 450

75[75] Caird v Moss 33 Ch. Div. 22 (1886)

76[76]Judicature Act, Cap 13 Laws of Uganda 2000

to restrain any person from doing any act as may be specified by the High Court. Injunctions
should be applied as it is provided for by the law. That is the evidence should be applied to
the law. Being an equitable remedy, injunctions require a balance of convenience. That is,
where granting of the injunction would cause harm to the other party then, the courts should
not grant it if you can get another remedy ( if one can be paid damages for the loss suffered.)
Osotraco limited V AG clearly shows that injunctions can be issued against the state.
Delivery up and cancellation. Under certain circumstances, where the existence of a
seemingly valid document which is, in fact, void, may cause embarrassment to the plaintiff
for example, because an action is brought on it, the court can order the document to be
delivered up for cancellation. The remedy applies to all kinds of document for example
insurance policies and negotiable instruments.
Auxillary jurisdiction (Creation of New Procedures) Equity’s auxiliary jurisdiction was
exercised in order to assist the defective procedure at common law with a view to common
law courts giving better and effective justice.77[77] Under auxiliary jurisdiction, courts of
equity would allow a defendant to give evidence when a common law court would not allow
him to do so, or adding parties to the proceedings to be heard where a common law court
would not allow. In another creation of new procedure, courts of equity had the power to
force what is known as disclosure whereas common law had no power to do so.78[78] When
the auxiliary jurisdiction is invoked, the Court’s reasoning process is, or should be, different,
and the range of available relief that requires consideration might include common law
damages. These facts necessarily affect the conduct of a case in at least three ways; There is
need for a claimant to first establish a common law right, either under the general law (in
contract, tort or to the extent that the law of restitution is not in truth equitable in character,
restitution) or a statute, in aid of which equitable relief such as an injunction or an order of
specific performance is sought. Secondly, that even if the legal right is established the
claimant needs to persuade the court that he or she should not, on an exercise of the court’s
discretion, be left to his or her remedy in damages at Law. That is, the claimant must
establish that damages are not an adequate remedy. The third is that consideration needs to be
given to a range of policy objections to a grant of equitable relief in aid of legal rights. For
example, equitable relief might be refused if a grant of relief is directed towards restraint of
commission of a crime and the court is minded to leave the criminal law to take its ordinary
course.79[79] Equitable relief might also be refused if enforcement of relief, whether by way of
specific performance or injunction, would acquire a degree of supervision beyond the court’s
capacity to administer.80[80] The above illustrated policy issues do not only arise in the
auxiliary jurisdiction. In one guise or another, they might arise in exclusive jurisdiction (for
instance in the enforcement of the obligations of a trustee) and be taken into account on a
discretionary defence or in the moulding of relief. Nevertheless, auxiliary jurisdiction
provides a fertile field for a consideration of policy issues because inherent in the jurisdiction
is the existence of a question whether or not a claimant for relief should be left to pursue a

77[77] Supra

78[78] Solicitors and Lawyers; Court of Equity; Disputes and Litigation.

79[79] Gouriet v. Union of Post Office Workers [1978] AC 435 at 481

80[80] J C Williamson Ltd v. Lukey & Mulholland (1931) 45 CLR 282, Patrick Stevedores Operations
No. 2 Pty Ltd v. Maritime Union of Australia (1998) 195 CLR 1
remedy for which the law otherwise provides.81[81]
In conclusion the underlying principle is that under Equity jurisdiction, Equity cannot suffer
a wrong without a remedy. Equity jurisdiction addresses the lacunas in the law that common
law creates since it is based on morally accepted justice.

QUESTION 5

QUESTION: Critically analyse the origins, rationale and nature of equitable remedies
with particular references to the remedies of specific performance, rescission and
rectification.
The approach to the question.
1. Define the equitable remedies of specific performance, rescission and
rectification.
2. Give the origin of the equitable remedies.
3. Discuss the remedies in integrity.
i) Specific performance
(1) The definition
(2) The nature and rationale of the remedy
(3) Specific performance in particular situations
(4) Defences in ration to specific performance in brief
(5) Damages in lieu or addition to specific performance
(i) Jurisdiction
(ii) Measure of the damages
(iii) Third parties

ii) Rescission
(1) The definition
(2) The nature and rationale of the remedy
(3) The grounds on which the remedy can be granted
(4) Situations where the remedy is lost thus the loss of right to rescission

iii) Rectification
(1) The definition
(2) The nature and rationale of the remedy
(3) The grounds on which the remedy can be granted
(4) Situations where the remedy is not granted
. Conclusion.

Equity does not have a universal definition but it refers to right doing, good faith, honest and
ethical dealings between individuals. Specific performance is an equitable remedy that is
within courts discretion to award whenever the common law remedy is insufficient, either
because the damages would be inadequate or the damages could not possibly be established.
Rescission is an agreement by contracting parties to discharge all remaining of performance
and terminate the contract. Restitution is the return or restoration of some specific thing to its

81[81] Equity: Principles, Practice and Procedure by Geoff Lindsay SC, 25 November 2003 9Revised
20 September 2007)
rightful owner or status or compensation for the benefits derived from a wrong done to
another.82[82]
Equity and equitable remedies owe their origin in England. Before the development of equity
in England, there was administration of common law by the judges. This led to the rigidity
and inflexibility in administering justice by the judges as a result of political and judicial
developments.83[83] The judges would make laws and issue writs without the approval of
parliament thus undermining its power. Common law courts would also handle cases with
well established remedies and the courts distinguished law and ethics. Thus this created a
loop hole in the law towards the administration of justice. In addition, the remedies that were
awarded by the common law courts were inadequate thus not fulfilling the end result of
justice.84[84]
Towards the thirteenth century, the litigants began to petition the King-in-Council. This was
so because the common law courts could not provide remedies in accordance to justice and
also corruption amongst the courts since the rich did manage the common law courts then
thus finding favour for the fellow rich.85[85] Thus the common law courts were now
imperfect and deficient. The petitioning by the litigants led to development of Lord
Chancery’s judicial power. The Chancery court could therefore grant reliefs based in King’s
prerogative thus the power to administer justice among the citizens. The reliefs were granted
in the name of the King. However, the common law judges started to have influence in the
chancery courts. They started to use precedents and to judge cases basing on the principles of
conscience and good justice thus causing injustice again.
However, through the exclusive jurisdiction, there was creation of new rights. Common law
enforced rights which were inadequate while equity provided remedies that were adequate
such as specific performance. Thus the development of equitable remedies in England.
Jegede M.E said, “It has been observed that the contemptuous disregard of the common law
for human values aided the expansion of the chancery jurisdiction in Britain, in that the latter
gave effect to the accepted elementary principles of social justice.”86[86] Since the courts
were now administered by the common law judges and chancery, they granted both equitable
remedies and inadequate remedies. The development of equity was to correct the any
injustice that was caused by strict application of common law. There was no administration
of law and equity in Uganda before the Judicature Acts 1873-1875 of the British.87[87]
However, through the Uganda Order-in-Council 1902 and 1911 Order 15 Uganda received
the English laws. Equity and common law were to be administered concurrently. Where the
laws do conflict, the principles of equity do apply. This is embedded in Article 2(2)88[88]
where any law or custom that is inconsistent with the Constitution shall be null and void. The
Constitution does preserve the natural justice which leads to equity. This is further reflected

82[82] Black’s Law Dictionary 7th Edition: Bryan A. Garner. Pages 1407, 1308 and 1315 respectively.

83[83] Equity and Trusts in Uganda: D J. Bakibinga. Page 5

84[84] Equity and Trusts in Uganda: D J. Bakibinga. Page 5

85[85] Equity and Trusts in Uganda: D J. Bakibinga. Page 5

86[86] Principles of Equity: Jegede M.E. Page 10

87[87] Equity and Trusts in Uganda: D J. Bakibinga. Page 13

88[88] The Constitution of the Republic of Uganda 1995. (as amended)

in section 14(2) and (3)89[89]which provides for how law is to be applied by the High and
Supreme Courts; and common law and equity are recognized. Section 11(1) and (2) of the
Magistrate Court Act Cap 16 also provides for the application of law and equity concurrently.
Therefore, that is how Ugandan courts came to apply the law and principles of equity. The
development of equity therefore, makes the courts today to administer the principles of equity
for example by awarding equitable remedies like specific performance, rescission,
rectification, injunctions, delivery up and cancellation of documents.
The rationale of specific performance is to enforce positive contractual obligations unlike an
injunction. It is an equitable which is granted by court as provided for in section 33 of the
Judicature Act Cap 13. The nature of the remedy is that it is granted when the common law
remedies are inadequate, at the court’s discretion and that equity will not act in vain.90[90] In
addition, the remedy is granted where the defendant will comply with the order. In Jones v
Lipman91[91] the defendant signed a contract where he sold a piece of land to the plaintiff.
However, he changed his mind by selling the land to a company where he was the owner. It
was held that the defendant could not resist the order of specific performance since he was
still in possession to complete the contract therefore, court ordered for specific performance
against the vendor and the company. The remedy also operates in personam. The remedy will
be issued against the individual defendant if he is within the jurisdiction of the court. In
Jones v Lipman ibid, it was the defendant whom the court ordered to perform not any other
person.
The general rule is that the remedy is not granted if the plaintiff would be adequately
compensated by the common law remedy of damages.92[92] Therefore, if the plaintiff can be
compensated with the damages, specific performance will not be granted. The instances of
where the remedy can be granted include the following. In contracts for sale of land. Land is
a real estate and unique therefore damages are inadequate remedies for the purchaser.
However, the remedy is discretionary. If damages are however adequate, then specific
performance will not be granted. This also portrays that the remedy acts in personam. In
Verall v Great Yarmouth Borough Council93[93] the court of Appeal confirmed the grant of
specific performance to enforce a contractual licence to occupy premises, there being no
alternative premises.
Contracts for sale of personal property. The general principle is that chattels, stocks and
share are not enforceable. Contracts for the purchase of government stock will not be
enforceable however damages will be awarded instead.94[94] However, section 51 of Sales
of Goods Act Cap 82 provides that the court has power to decree the remedy of a contract of
specific or ascertained goods. The exception to the rule is also that if chattels are special,
unique or of special value like individuality, beauty, or rarity the remedy will be enforceable.
In Behnke V Bede Shipping Co.95[95]the court ordered specific performance of a contract

89[89] Judicature Act Cap 13

90[90] Equity and Trusts in Uganda: D J. Bakibinga. Page 73

91[91] [1962]1 W.L.R 832

92[92] Equity and Trusts in Uganda: D J. Bakibinga. Page 75

93[93] [1981]1 Q.B 202

94[94] Dominion Coal Co. v Dominion Iron & Steel Co. [1909] AC 293

95[95] [1927]1 KB 649

for a sale of a ship. Wright J. stated that the ship was of “perculiar and practically unique
value to the plaintiff.”
Contracts to pay money are generally not enforceable under the remedy. However the
exception is that where there is payment of an annuity. In Beswick v Beswick, 96[96] Peter
who was a local merchant concluded a contract with John that he should pay the latter’s wife
five pounds annually when he dies. Peter therefore sold his business to John. However when
Peter died, John breached the contract. It was held that the widow was entitled to the money
since they had to follow the rule of annuity. The reason was that the common law remedies
could be inadequate and it would be difficult to estimate the damages. Other exceptions
include where the contract is to pay a third party if the damages to be paid would be
nominal97[97]; where a contract is to take up and pay for debentures thus section 94
Companies Act Cap 110; and also to enforce the execution of a mortgage if the money has
already been lent therefore, equity will order an indemnifying party to pay a debt if that is the
true construction of the contract.98[98]
Specific performance is also not granted without varnishing consideration. However, the
exception is that it can be granted where the plaintiff is in possession of the land as a
volunteer. Therefore, it would be unfair to deprive him of the legal estate.99[99]
The contracts requiring supervision are not enforceable thus no remedy of specific
performance will be granted. The exception is that where the vendor is uncooperative, the
court appoints someone in his place to execute the contract. In Cooperative Insurance
Society Ltd v Argyll stores Ltd100[100]the court of Appeal held that a tenant’s covenant to
keep demised premises open for retail trade during normal hours was specifically
enforceable.
Contracts for creation of transient or terminable interests will not be specifically enforceable.
This is because equity does not act in vain. Specific performance will not be granted for
example when an agreement for a lease has expired. However, the exception is where there
has been a reasonable time past when the lease has expired. A contract was refused after a
period of one year.101[101]
Specific performance will also be granted were the contract is enforceable. In Ogden v
Fossick102[102] it was held that specific performance could not be granted because the part
of the contract of the employment could not be enforced. However, the contract may be
enforced when it has several parts within it.103[103] Other sceneries where the remedy will
not be awarded are contracts to leave property by will; contracts to transfer good will;

96[96] [1968] AC 58

97[97] Commentary and cases on the Law of Trusts and Equitable Remedies 10th Edition: D J. Hayton.
Page 952

98[98] Equity and Trusts in Uganda: D J. Bakibinga. Page 76

99[99] Equity and Trusts in Uganda: D J. Bakibinga. Page 77

100[100] [1996] E.G 128

101[101] Lavery v Pursell (1988) 39 Ch. 508

102[102] (1862) 4 De G.F and J.426

103[103] Beswick v Beswick supra, Equity and Trusts in Uganda: D J. Bakibinga. Page 79
contracts for personal services; and contracts that refer to arbitration for example in Re Smith
(1890)45 Ch.D the court enforced the arbitrators award instead of specific performance. This
is because in the agreement the parties agreed that if a dispute arises, it will be settled by
arbitration thus Order XLVII Rule 1(1) of the Civil Procedure Rules of Uganda.
Defences available to stop the court to grant the remedy include mistake and
misrepresentation, in Malins v Freeman the remedy was not granted although the mistake
was due to the defendants fault and not on the vendor. The conduct of the plaintiff that is if he
comes with unclean hands and they are also not prepared to do equity, the remedy will not be
granted. Laches and acquiescence will also make the court not to grant the remedy that is if
the plaintiff delayed to bring the case refer to Lavery v Pursell supra. This is also supported
by the maxim of equity that delay defeats equity. The remedy will also be refused if there will
be any hardships caused on parties thus equity does not act in vain. If there is misdirection of
the matter and also where if the remedy is granted will be against public policy104[104] for
example a remedy forcing one to perform an illegal contract.
Thus, the remedy is discretionary and awarded to enforce a positive contractual obligation.
Damages awarded should be equitable105[105] and within the jurisdiction. Specific
performance can also be granted for the benefit of third parties thus refer to Beswick v
Beswick supra.

Rescission is another equitable remedy that was developed. The nature of the remedy is
that a contract is voidable but not void. Therefore, the contract remains valid until it is
rescinded by the parties to it. The rationale of the remedy is to restore the parties to their
original place as if the contract had not occurred.106[106] Rescission is not a judicial remedy
but an act of the party entitled to rescind. However, court may interfere and order an account
to be taken of property that had passed between parties.107[107] The main essence will be
restoring the parties to their status qou before the contract. However, the court will decide
whether the right to rescind was justifiable and whether the remedy relied upon is
effective.108[108]
There remedy is granted on the following grounds. Where there is mistake. This is both
common or mutual and unilateral mistake. Mutual mistake is where both parties to the
contract are mistaken about the contract thus, rescinding the contract. In Sole v Butcher
[1950]1 KB 671, it was held that a contract, is liable to be set aside if the parties were under a
common misapprehension as to the facts or to the respective rights which were so
fundamental. The recognized mistakes are the existence of the subject matter, identity to the
subject matter and the quality of thing contracted for.109[109] Unilateral mistake is where
one party is mistaken. In Cundy v Lindsay (1878)3 AC it was held that there was no contract
between the defendant and the plaintiffs since the plaintiffs did not intend to deal with the
defendant but with another person. Therefore, the contract can be rescinded.

104[104] Wroth v Tyler [1974] Ch.30

105[105] Lords Cairn’s Act 1858 (UK) section 2

106[106] Erlanger v New Sombrero Phosphate Co. (1878)3 Appeal Cases 1278 at 1278

107[107] Equity and the Law of Trusts 8th Edition: Philip Pettit

108[108] Equity and Trusts in Uganda: D J. Bakibinga. Page 84

109[109] Equity and Trusts in Uganda: D J. Bakibinga. Page 85

Misrepresentation is also another ground where the remedy can be granted. Innocent
misrepresentation is where the defendant believes in the truth of his action even if he has no
reasonable ground for his belief.110[110] Therefore, a misrepresentation may arise where
one does not disclose something. In Anderson & Sons Ltd v Rhodes Ltd [1967] ALLER 850,
a commission agent made a representation to the seller about the insolvency of his principal,
the buy. It was held that agent owed a duty of care to the seller thus in such situation a
contract can be rescinded. Fraudulent misrepresentation is where a party makes a false
representation knowingly so that the other can act upon it. The law of equity therefore renders
that contract as rescinded. In Derry v Peek (1889) 14 AC 337 the House of Lords held that a
statement is fraudulent when made with knowledge of its falsity; without belief in its truth; or
recklessly, not caring whether it is true or false. In Sule v Aromire [1951]20 N.L.R 20, the
misrepresentation entitled the plaintiff to cancel and a refund of the purchase price.
Constructive fraud is also another ground for reward of the remedy. This is mainly as a result
of undue influence. This arises where one party is influenced into a contract which he does
not want. However, the burden of proof is on the one who alleges. There are some contracts
that do not arise to undue influence like parent and child; doctor and patient; solicitor and
client; teacher and student; trustee and beneficiary; employer and employee; and religious
ministry and disciples.111[111] Non-disclosure of material facts is another situation.
However the general rule is that a party to a contract is not under a duty to disclose
information relation to a transaction. The exception is that sometimes the non-disclosure may
lead to misrepresentation. This can be in context of matters concerning land family
arrangements, contracts for surety and statutory disclosure. The right to rescind is lost when
the party affirms the transaction that is he agrees to the contract; when restitution in
integrum arises thus not being substantially possible taking account of services rendered or
property deteriotion; and also when an innocent party acquires rights for value before the
plaintiff sets aside the transaction.112[112]

Rectification is a discretionary remedy to rectify a document a document so that it

accords correctly with what the parties agreed upon. In Lavell v Christmas v Wall (1911) 104
L.T 85, Cozen-Hardy M.R said that the essence of rectification is to bring the document
which was expressed and intended to be in pursuance of a prior agreement into harmony with
that prior agreement. Thus the remedy presupposes an antecedent contract. The rationale and
nature of the remedy is therefore to rectify a number of documents in concluding
conveyancing documents. In White v White (1872) L.R 15 Eq. 247, the court ordered
rectification of the deed of conveyance to conform to the agreed intention of the parties.
Other documents include leasehold agreements, building contracts, and insurance policies.
However, the documents that cannot be rectified include wills where there is fraud
(Administration of Justice Act 1982 section 20). The remedy is also limited to harmonized
written documents. In Mackenzie v Coulson (1969) L.R Eq.36 James V.C said that courts do
not rectify contracts unless when the instruments might have been made in pursuance to the
terms of the contract.

110[110] Equity and Trusts in Uganda: D J. Bakibinga. Page 85

111[111] Law of Contract in Uganda: D J. Bakibinga. Page

112[112] Commentary and cases on the Law of Trusts and Equitable Remedies 10th Edition: D J.
Hayton. Page 975
The remedy can be granted on grounds that there existed a contract. Thus, there has to be a
contract of antecedent. In Rose v Pim, Denning L.J said that it is necessary to show that the
parties were in complete agreement on the terms of the contract but an error wrote them down
wrongly. There has to be mistake. This is the same a ground for rescission. Thus without
mistake, the remedy cannot be granted. There must be continuing intentions of the parties.
Their intention to execute a contract must not be altered. Thus the court looks at what the
parties said and what they wrote down. There must also be mistake of fact not of law in order
for the remedy to be granted. In Napier v William (1911)1 Ch.361, Warrington J. said that a
remedy will not be granted where mistake is arising from legal effect but it must be from the
legal effect of words used.
The remedy is denied when the contract cannot be performed that is when it is granted it will
act in vain for example where there is a bona fide for value (Smith v Jones [1954]2 ALLER
825); when the contract was fully executed. This means that the parties agreed; and where
there are laches thus delays in time, the remedy will not be granted. This follows a principle
that delay defeats equity.
In conclusion, the above remedies are all discretionary. They were developed to fill the gaps
that common law was leaving for example by not providing an adequate remedy. This created
a meaningless end of the law since it was not achieving justice. Therefore, through the
chancery courts, the remedies were developed to ensure justice by providing equitable
remedies as they have been discussed above in particular specific performance, rescission and
rectification.

The Application of Doctrines of Equity in Uganda

The application of Doctrines of Equity in Uganda

1.0. SYNOPSIS

Equity in simple terms means whatever is just or right in mans being with fellow man. Equity
also possesses a technical meaning that may be divided into two categories, that is the general
juristic concept and the technical juridical concept all of which supplement each other and
affect the administration of justice113[i].

The general juristic sense mainly denotes moral administration of justice by

judicial bodies taking into account special facts of a particular case .i.e. humane and liberal
interpretation of the law. This is incorporated in Art 126(2) (e) of the 1995 Constitution of the
Republic of Uganda.114[ii] This was manifested in the case of Stephen Mabosi V URA
115[iii]

In Uganda the Equity was received by the 1902 and 191I Orders in Council which made
Equity and Common Law to be applied concurrently, and where there was conflict between
the two with reference to the same subject matter, the rules of equity would prevail.

The judicature statute cap 13 sec 14(3) gives strength to this principle as follows; the
applied law, the common law and doctrines of equity shall be in force in so far as the
circumstances of Uganda and its people permit.

The magistrates' court act cap 16 similarly facilitates the application of common law
doctrines as well as equity under sec 11(1)116[iv] as follows; in every civil case or matter
before a magistrate's court law and equity shall be administered concurrently. It follows that
equity is applicable in Uganda thereby giving relevance to its doctrines in Uganda's legal
scene. It is of vital importance to note that courts of law in applying Equity take into
consideration the maxims of Equity which are the basis of the various doctrines of equity that
include the following.

5.0 DOCTRINE OF NOTICE

The concept of Notice refers to the knowledge of an existing fact; According to Prof.
Bakibinga117[v] the rationale of the doctrine is to prevent a buyer of superior title from
setting it up against earlier owners of inferior interests which affect the property. The effect
of this is that the buyer of the legal estate with notice of the prior equitable interests affecting
the estate takes it subject to prior equitable interests in this regard; “Equity looks at the
substance rather than the form” Notice can be Actual, constructive or imputed. And it is
based on the maxim "he who comes to equity must come with clean hands".

ACTUAL NOTICE; This is a situation where the buyer of an estate has actual or
express notice of a prior interest at the time when he or she made the purchase or at the time
before the purchase was completed .

In regard to the relevance of the doctrine of notice .The Registration of Titles Act (R.T.A)
Section 64118[vi] encompasses the doctrine and it provides that a buyer of land shall hold
that land subject to such encumbrances as notified to the registrar. In Sempa Mbabali v w k
kidza Odoki J held that the defendants plea of bona fide purchaser could not stand because
they knew all along that that part of land they had purchased was for burial grounds and also
the seller had sold them the land before his share of the land had been ascertained. This
therefore means that his hands were not clean.

CONSTRUCTIVE NOTICE; defined by Salden J in Williamson v Brown119[vii];

where a purchaser has knowledge of any fact sufficient to put him in inquiry as to the
existence of some right or title in conflict with that he is about to purchase he is presumed
either to have made the inquiry and ascertained the extent of such prior right or to have been
guilty of a degree of negligence equally fatal to his claim. The prior interest in land should
always be put into consideration In U.P.T.C V Lutaaya120[viii]. Karokora J.S.C held thus
"A proprietor takes land subject to the interests of any tenant in the land in possession even if
he or she had no actual notice of the tenant".

IMPUTED NOTICE; notice which is neither actual nor constructive may be

imputed to the buyer through actual notice to the agent. It's established in agency law that that
notice to an agent is notice to the principal. In this regard, a buyer who instructed his agent to
buy property at an auction sale was taken to be affected by notice of an equity which came to
his notice during the course of the transaction. In Sejjaka Nalima v Rebecca Musoke121[ix]
Odoki j a held that the appellant was not bona fide purchaser without notice owing to the fact
that Musoke and co advocates who were acting as her agents had known of the alleged fraud
concerning the disputed property

2.0 DOCTRINE OF ELECTION

One of the most important doctrines of Equity is the doctrine of Election which is to the
effect that a person cannot claim benefit and reject burden under the same instrument. This
meaning is derived from the case of Codrington -v- Codrington per Lord Cairns that a
person cannot accept a benefit under a deed or will without the same time conforming to all
its provisions.

Election is based on the maxim that “he who seeks Equity must do Equity”. Equity is either
express implied from the electors conduct and it therefore if X gives a gift of his property to
Y and in the same instrument makes a gift of Y’s property to Z then Y will be put to his
Election. Y may elect to take under the instrument and take over X’s property or he may elect
against the instrument.
The essentials of election were espoused in Re Edwards.122[x] Lord Jenkins L.J stated that
an election should consist of an intention on the part of the testator to dispose off certain
property, that the property should not actually be the testators or testatrix own property the
property the testator purports to dispose of should be alienable by the owner, for if its
inalienable, the owner cannot comply with the wishes of the donor. The property given is
available and finally that a benefit should be given by the will to the true owner of the
property.

In Uganda the relevance of the doctrine of election is manifest in The Succession Act which
has a number of provisions that incorporate the doctrine of election ranging from Section 167
to Section 178, Sec 167123[xi] and provides that a person whose property has been
disposed off by the testator has a right to elect. Hence these provisions illustrate the fact that
the doctrine of election is incorporated into Uganda’s legal system.

Sec 64(2)124[xii] states that "…the land which is included in any certificate of title or
registered instrument shall be deemed to be subject to the reservations, exceptions, covenants
conditions and powers if any contained in the grant of the land and to any rights subsisting
under any adverse possession of the land and to any public rights of way and to any
easements acquired by enjoyment…."

It is noteworthy however, that though the doctrine is reflected in Uganda’s legal frame work,
it has been of little practical importance as no significant cases have been decided relating to
Election

3.0. DOCTRINE OF SATISFACTION.

Also in consideration is the doctrine of Satisfaction defined as “the donation of a thing with
the intention that it is to be taken wholly or in part in extinguishment of some prior claim of
the donee.” per Lord Romilly in Chichester-v-Coventry125[xiii] thus where W is under an
obligation to give X something and W gives X something else, there may be a presumption
that W’s gift was made with the intention of satisfying his obligation to X. This doctrine is
based on the maxim “equity imputes an intention to fulfill an obligation”

Satisfaction takes several forms first in consideration is satisfaction of debts by

legacies126[xiv], the general rule is that equity imputes to the donor an intention to give the
legacy in satisfaction of the debt. Thus in the case of Talbot v Duke of Shrewsbury 127[xv]
Lord Trevor stated that "if one being indebted to another a sum of money does by his will
give him a sum of money as great as or greater than the debt without taking any notice at all
of the debt, this shall never the less be in satisfaction of the debt, so that he shall not take both
the debt and legacy.

In this case the legatee has a choice to either to take the legacy and forego the debt or to
forego the legacy and insist on his contracted debt. However it should be noted that there are
circumstances in which intention to fulfill an obligation (satisfaction) may not be presumed,
hence limiting the application of the doctrine in Uganda. Fore example where the debt was
contracted after the will , where the legacy is less than the debt where the legacy and the debt
are of different nature and where the legacy is not as beneficial to the creditor as the debt.
Also sec 164 of the succession Act has limited the application of this doctrine as far as this
aspect of satisfaction is concerned in Uganda.
"where a debtor bequeaths a legacy to his creditors and it does not appear from the will that
the legacy was is meant as satisfaction of the debt , the creditor shall be entitled to both the
legacy as well as to the amount of the debt"

Secondly Satisfaction of portion debts by legacies128[xvi] the general rule is that equity
leans against double portions; hence equity will provide for the satisfaction of portion debts
by legacies to ensure equal division of the parents property among the children129[xvii]
hence where the legacy is equal to the promised portion or exceeds it satisfaction of the
portion debt is presumed. In Uganda however this is limited under Sec 165 of the succession
Act "where a father…does not intimate by the will that the legacy is meant as a satisfaction
of the portion , the child shall be entitled to receive the legacy as well as the portion ". Under
satisfaction of a portion debt by a portion Lord Selborne130[xviii] stated "where a
father…gives a legacy and later makes a gift in the child's favour, there is a presumption that
the gift was either wholly or in part in a substitute for or an ademption of the legacy. " lastly
is the satisfaction of legacies by legacies.

How ever the doctrine will only apply if the legacy is in a sum as great as or greater than the
debt or if there is a direction to pay debts131[xix] (Satisfaction of debts by legacies)

The doctrine of satisfaction has been incorporated in Uganda’s legal scene and can be traced
in Sections 164 to 166 of the Succession Act. Section 164 provides that where a debtor
bequeaths a legacy to his or her creditor, and it does not appear from the will that the legacy
is meant as satisfaction of the debt the creditor shall be entitled to the legacy as well as well
as to the amount of the debt. This means that a testator must show his intention to extinguish
the debt which is in conformity with the holding in Hammond –v-Smith132[xx]. The
Judicature Act section 14(2) (b)133[xxi], Magistrates Court Act section 11134[xxii] also
provide for the application of the doctrine of Satisfaction in Uganda’s legal scene. Its
practicability is however very insignificant.

4.0 DOCTRINE OF PERFOMANCE

Performance is yet another doctrine of Equity which is to the effect that where a person
covenants to perform a particular act and later performs an act “which may be converted to a
completion of this covenant”, it shall be supposed that he meant to complete it per Kenyon
MR, in Sowden v Sowden.135[xxiii] This doctrine is based on the maxim that “Equity
imputes an intention to fulfill an obligation”136[xxiv].

Performance may take the form of a covenant to purchase and settle land, or a covenant to
leave money; it also applies to covenants in marriage settlements to lay out money, on the
purchase of land to be held on trust of the settlement. The doctrine also applies to situations
where there is a covenant to pay money to trustees to be used by them for the purchase of
land. In this case, the covenanter will simply be regarded as performing the covenant by
buying land himself. The doctrine also applies where the covenant is to settle property of a
certain value.
The doctrine of performance in our legal scene today has a great effect in succession matters;
wills are construed literally through the wording as well as the circumstances surrounding the
making. The other factors that reflect performance in succession matters are the onerous
bequests, contingent bequests and conditional bequests contained in Secs 109-123 of the
succession Act. . However the fact that there is limited case law shows that the doctrine is of
little practical relevance in Uganda's legal scene.

CONCLUSION

In sum, though the doctrines of equity are encapsulated in various legislations in Uganda,
most especially the succession act, it is generally agreed that they are more idealistic than
practical in Uganda's legal scene. This is due to prevalence of customs, illiteracy and the fact
that many people die intestate. It would be trite to say that the complex nature of these
doctrines has limited their relevance to Uganda since our legal system is not as developed as
in England where they are said to have originated. It would there fore be worthwhile to
educate the society on matters pertaining to the legal principles underlying these doctrines
and also revise the laws that have them embedded within them so as to make them clearer
and more understandable. In so doing with time the abstract nature of these principles can be
illuminated upon and made practicable in Uganda's legal scene. Generally, decided cases
incorporating the doctrines of Equity are hard to come by in Uganda. However this does not
mean that the doctrines are practically of no relevance having highlighted some practical
relevancies above