KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY

FACULTY OF LAW
EQUITY

LECTURE ONE
Introduction
The word ‘equity’ literally means fairness. According to the Black’s Law Dictionary, “equity”
demotes the spirit and habit of fairness, justness, and right dealing that regulate the affairs of
persons. Thus, in simple sense, equity means doing what is right, being honest, fair and transparent
in dealing with other persons an ethically and morally right manner.

In a legal sense, equity refers to the power or jurisdiction of the court to meet the standards or
requirements of law in any given case. Here, the court exercises its discretion to ameliorate the
severe, strict or rigid application of rules of law, so as to achieve substantial justice. The court
achieves this by, where need be and having regard to the circumstances of each case, delivering
rulings that are considered ‘liberal or humane’ and, at the same time, avoiding substantial injustice
to the party affected by that ruling.

In its very technical sense, ‘equity’ is the special and peculiar department of the English legal
system which was created, developed and administered in the Court of Chancery. This definition, it
must be noted, is best suited for pre–Judicature Act of 1875 which provided for the administration
of both common law and equity by the same tribunal. Thus, Maitland asserts that prior to 1875,
Equity was that body of rules which was administered only by the courts known as Courts of
Equity. See “Equity (Brunyate Ed.) 1949.” The Judicature Act of 1875 has merged both the common
law and equity courts into the Supreme Court of Judicature, which court administered both the
rules of equity and the rules of common law.

Thus, Abisoye, et al, posit that presently, Equity is that body of rules administered by English courts
of justice which, were it not for the operation of the Judicature Acts, would be administered only by
those courts known as Courts of Equity.

In sum, it refers to the set of legal principles, rules and procedures, in jurisdictions that follow the
English Common Law tradition, that supplement strict rules of law where their application would
operate harshly. It is also seen as the body of law consisting of rights and remedies which evolved
historically through the Court of Chancery. Equity is commonly said to “mitigate the rigors of
Common Law” allowing Courts to use their discretion to do what is just and fair in accordance with
natural justice.

Philosophical ideas of equity

The following ideas come from Aristotle’s Ethics, and should be understood as considering the
difference between common law and equity:
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 “For equity, though superior to justice, is still just… justice and equity coincide, and although both are
good, equity is superior. What causes the difficulty is the fact that equity is just, but not what is legally
just: it is a rectification of legal justice.”

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

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

Thus, equity exists to rectify what would otherwise be errors in the application of the common law
to factual situations. Such errors may arise when the judges who developed common law principles
or the legislators who passed statutes could not have anticipated such an exceptional situation.

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

Section 14 of the Ordinance provides:

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

The Courts of Gold Coast were also to…

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

Essential feature of equity:

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

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

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

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

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After the Norman Conquest of England 1066, the King himself adjudicated cases where the royalty
was interested therein. The court was called Coram Rege (i.e. before the King”). Later on, Royal
Courts began to emerge from the King’s Council (Curia Regis) after the King delegated authority
for his royal officials to administer justice. This did not take over the jurisdiction of the local courts
immediately, but over a long period of time the local courts lost jurisdiction over cases.

A practice of sending judges around the country to hold assizes (or sittings) to hear cases started.
This enabled the judges, over a period of roughly 200 years to take the best local laws and apply
them throughout the land, thus creating a system of law that was “common to the whole country,
hence common law.”
• The King’s Council had three functions of state: Legislative, Executive and Judiciary
Eventually, the court split off from the Council and formed the main common law courts:

Court of Exchequer – to collect revenues i.e. it administered the King’s finances;

Court of Common Pleas – to administer cases involving the King’s rights; and
Court of Kings Bench – adjudicated cases involving the King’s interests especially criminal
cases and cases involving high noblemen.

Over time, a Royal Proclamation of 1195 appointed “Justice of Peace” (or Magistrates) and “Knights
of the Peace” to assist the Sheriff in enforcing the law. Later they were given judicial functions and
dealt with minor crimes.

The Common Law was successfully practiced from 1066–1285. After that period, identified
weaknesses eroded its smooth operation and procedures. Some patent defects included:
(i) the writ System;
(ii) the doctrine of precedent; and
(iii) defects in the Common Law

The Writ System

Before action could commence at any of the common law courts, the Chancellor (Secretary and
keeper of the king’s Great Seal) had to issue a writ for and on behalf of the injured person.

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

The same consequence was meted out to those who chose wrong writs: the writs would be thrown
out as being incompetent.

The Doctrine of Precedent

As the work of the Common Law Courts grew, the judges began to use previous decisions as a
guide for later cases. The judges were unwilling to depart from their previous decisions.

There was no innovation and creativity in the judgments the judges delivered.

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Defects in the Common Law
Bribery and corruption of the judges and officials

Only one remedy was available - damages

Use of juries – intimidation and control

Attention to formalities (rigidity)

Lack of recognition of trust

EMERGENCE OF EQUITY
Most persons were aggrieved as a result of the defects or harshness of the common law.

They therefore started sending petitions to the King. The petitioners sought his “extraordinary
justice”. This is because the King was believed to be the fountain of justice.

Despite the development of the common law courts, justice remained a royal prerogative, and
therefore the King retained a residuum of justice.

Initially, the King himself together with his Council considered the petitions. When the petitions
became too many, the King later adopted the practice of referring the petitions to the Chancellor for
considerations.

Thus, by the early fourteenth century, the Lord Chancellor was dispensing justice as the “keeper of
the King’s conscience.” The Chancellor began to act as a judicial official, and the Chancery to
function as a court. Among its functions was to entertain petitions by those asking the Chancellor to
do equity, and seeking justice they could not obtain from the law courts. The officials in charge of
these courts were originally clerics, and they drew on civil and canon law in formulating their
approach to equity.

The equity court had one power: to act against the person and hold them in contempt. Also, equity
courts did not change the law, but they could prevent people from enforcing legal judgments that
were inequitable.

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

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

In course of time, however, rules grew up to govern the Chancellor’s discretion. By the 15th century
the system of equity had fairly developed and was operating side by side the common law.
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Developments in Equity
• No writ, juries and Latin;
• It addressed questions of facts and not law;
• The Chancellors were ecclesiastics;
• Equity acts in personam (on the conscience of the defendant and not with rules);
• Satisfactory remedies;
• New rights and remedies – trust system, mortgage redemption

EQUITY AND THE COMMON LAW

Distinguish between equity’s exclusive, concurrent and auxiliary jurisdictions:

Exclusive Jurisdiction
Equity recognized and enforced new rights and remedies that the common law did not observe.
Example: breach of confidence and trusts relationships.

Concurrent Jurisdiction
The grant of remedies which the common law had alternatives –supplementing the common law.
(e.g. equitable remedies in matters of contract, equitable property interests). Equity was said to be
“tapping the common law on the shoulder.”

Auxiliary Jurisdiction
Under this jurisdiction equity did not deal with cases itself; it merely assisted the Common Law
Courts to do justice. Common law did not have the power to compel witnesses or order for the
discovery of documents.

Thus, if a vital witness in a case at the common law court refused to appear, or a vital document in
the possession of one of the parties who was unwilling to bring it to court, the common law courts
were helpless and would have to decide the case only on the evidence available to them.

In such a case, the party concerned would apply to the Court of Chancery for an order to compel
the appearance of the witness or the discovery of the document and this aided the common law
court to obtain all the evidence required in order to arrive at a just decision.

THE RIVALRY BETWEEN THE TWO COURTS

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

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

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

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

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

… law and equity are distinct, both in their courts, their judges and the rules of justice; and
yet they both aim at one and the same end, which is to do right …both join in the
manifestation of God’s glory.

…when [however], a Judgment is obtained by Oppression, Wrong and a hard Conscience, the
Chancellor will frustrate and set it aside, not for any error or defect in the judgment, but for
the hard Conscience of the Party.

The Cause why there is Chancery is, for that Men[']s Actions are so divers[e] and infinite,
That it is impossible to make any general Law which may aptly meet with every particular
Act, and not fail in some Circumstances.

Therefore, equity should take precedence over the common law.

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

THE PERSISTENT CRITICISM OF EQUITY

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

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

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

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RESOLUTION OF THE CONFLICT
1867 – Appointment of a Royal Commission on Judicature

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

The Act abolished the Court of Chancery and the Common Law courts and in their place the High
Court of Justice was set up.

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

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

Currently therefore, the divisions of the High Court of England and Wales are: The Queen’s Bench
Division, the Chancery Division and the Family Division.

EFFECT OF THE JUDICATURE ACTS

Provided that in all divisions, law and equity should be administered together per section 25.

Provided that in all matters in which there was any conflict or variance between the rules of equity
and the rules of common law, the rules of equity should prevail. Section 25(11) provided that:
“Generally in all … in which there is any conflict or variance between the rules of equity and the
rules of the common law with reference to the same matter, the rules of equity shall prevail.”

Hence the judicature system has two essential and conceptually distinct effects. These are:
• It fuses the procedures of the old common law and equity jurisdictions.
• It reinforces the statutory supremacy of equity or remedy (or provides a defendant a defence)
which he or she lacked under the old system.

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

This doctrine was developed to resolve problems of tenancies, where requirements of writing and
formalities made a lease void or unenforceable at common law.

Facts: A landlord granted a seven year lease of a mill to a tenant. The lease was not under
seal and was therefore void at law. After the tenant had gone into possession, the
landlord demanded, pursuant to terms of the written lease, a years’ rent payable in
advance. The tenant refused to pay the rent demanded. The landlord detained the
tenant’s goods and the tenant sued for damages for wrongfully distress. The tenant

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 argued that he was merely a tenant from year to year, in possession without a lease,
with rent payable quarterly, not in advance.

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

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

if an instrument giving effect to the new tenancy on the agreed terms had been
executed’(i.e. a valid equitable lease)

However, note that an equitable lease is not a legal lease.

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

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

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

If a guarantor has guaranteed the tenant’s obligations under the lease, the guarantor is not
bound by the guarantee – Chan v Cresdon.

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

The “Fusion Fallacy”

Issue: whether the Judicature Legislation fused Equity and the Common Law, so that
equitable and common law principles are merged.

Or: Whether the Judicature Act fused the administration of common law and equity or it
fused the rules and principles and common law and equity.

Lord Evershed in ‘Equity After Fusion, Federal or Confederal,’ (1948) JSPTL (NS) Vol. I p. 171 at 175
argued that: when one speaks of “fusion” the person may mean one of two things: firstly, one may
mean that the component parts disappear altogether in the new entity that is created, or one may
mean that they have combined for particular purposes or have become subject to some single
control, though retaining their separate and original individualities.

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One school of thought argues that in addition to the fusion of administration of justice, the acts also
blurred the distinction between rules of common law and rules of equity and that these two systems
of rules have been replaced by a ‘common rule’. For instance, Denning J (as he then was) held in
Nelson v. Larholt (1948) 1 KB 339, 343; that: ‘It is no longer appropriate … to draw a distinction
between law and equity. Principles have now to be stated in the light of their combined effect.’

On the other hand, there is the view that the Judicature Acts is only created a common court for the
administration of law and equity and not a fusion of law and equity; and that where the principles
of the two conflicts, the principles of equity prevail. Thus, Prof Ashburner in his book “Principles of
Equity” (1902) p.23 alluded to what has become known as the fluvial metaphor thus:
“… the two streams of jurisdiction, though they run in the same channel, run side by side and
do not mingle their waters”

This position was followed in the case of Salt v Cooper, (1880) 16 Ch. D 545 where Sir George Jessel
MR held that:
“…the main object of the Acts [Judicature Acts] was not the fusion of the law ad equity, but
the vesting in one tribunal of the administration of law and equity in all actions before that
tribunal.”

Lord Cairn observed in Pugh v. Heath (1882) 7 App. Cas. 235, 237 thus: “The court is now not a
court of law or a court of equity; it is a court of complete jurisdiction, and if there were a variance
between what, before the Judicature Act, a court of law and a court of equity would have done, the
rule of the court of equity must now prevail.”

It is submitted that the very wording of the Judicature Act shows that there was the fusion of only
the administration of the rules of common law and equity. However, the rules and principles of
common law and equity were not merged into ‘common rules.’ See

Section 25 of the Judicature Act acknowledged the “union of the several courts whose jurisdiction
[is hereby transferred to the High Court of Justice…”

Also, section 25(11) posited ‘any conflict or variance between the rules of equity and the rules of
the common law with reference to the same matter, the rules of equity shall prevail.’ This
provision, it has been argued, gives a clear recognition to the distinction that continues to exist
between the rules of law and the rules of equity.

Thus, Lindley L.J. observed in Joseph v. Lyons (1884) 15 QBD 280 thus:
“Reliance was placed upon the provisions of the Supreme Court of Judicature Acts 1873, 1875
and it was contended that the effect of them was to abolish the distinction between law and
equity. Certainly that is not the effect of those statutes; otherwise they would abolish the
distinction between trustee and cestui que trust.”

It has thus been argued that it is preposterous to suggest that there has been a fusion of the two
systems of law by the Judicature Acts. Thus, the distinction between the equitable ownership of a
beneficiary and the legal ownership of a trustee under a trust is still well recognised.

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RECEPTION OF EQUITY INTO GHANA
Reception Clause of the Supreme Court Ordinance, 1876 provides:
“the Common Law, the doctrines of equity, and the statues of general application which were in force in
England on 24th July, 1874, [which included the shall be in force within the jurisdiction of the court”.

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

Whether every court of Ghana is a court of common law and equity

The position of the law in Ghana is well established that every court in Ghana is a court of both
common law and equity. As far back as 1976, the Court of Appeal pronounced upon the position of
the law on the fusion of jurisdiction in law and equity, in the case of Bou-Chdid v Yalley [1976] 2
GLR 258. As the learned Archer J.A. (as then was) pointedly expressed himself, at page 264 of the
law report thus:
“Notwithstanding the vicissitudes of the courts in Ghana since they were established about a
century ago, no one will venture to suggest that throughout this period separate courts have
administered the common law and equity in Ghana. It follows that the Plaintiff as an
equitable owner in possession can maintain an action in trespass at common law in any court
of law in Ghana.”

Read also:

Article 11 of the 1992 Constitution

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

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