LAW OF EQUITY AND

TRUSTS 2013

SECOND YEAR SEMESTER ONE

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REGISTRATION OF TITLES ACT  Did the statutes modify the principle laid down in the resolution of
the dispute?
Trusts act  The err in oxford’s case
Judicature act Common law procedure acts
Topic A Lord Cain’s act
Historic outline of the evolution of equity Judicature acts of 1873-75
What is equity and how did it evolve? ADMINISTRATION OF EQUITY IN UGANDA’S LEGAL SYSTEM
Equity is that branch of the law that deals with fairness and justice. In Uganda we have concurrent administration of common law and equity.ss.
14 (JCA) and (MCA)
Origins:
Repugnance doctrine
1. English equity; statute of Westminster.
2. Common law (though equity evolved alongside common law) There are two types of equity i.e. equity in the general sense and equity in
3. the technical sense
Nature of Chancery jurisdiction
It was based on common law rules but more liberal. “As a general rule, English technical equity does not apply to customary
The equity was based on reason, conscience and justice. law but equity in the broad sense has made remarkable inroad into the
territory of customary law.” Per LL.B student
Nature and content of equity
1. Exclusive jurisdiction (equity created new rights) a) What is meant by technical 'equity’ and ‘equity’ in broad sense?
2. Concurrent jurisdiction (equity created new remedies) b) State the areas where either has influenced the rules of customary
3. Auxiliary jurisdiction (The creation of new procedure) law?

Relationship between equity and common law a) What is English technical equity?
b) Technical equity?
Head of the common law courts was the Lord chief justice whereas for the c) Equity in the broad sense?
Chancery courts it was the Lord Chancellor.

In the year 1615, a great quarrel broke out between the lord chief justice At Equity an agreement for a lease is a good as a lease.
Cock the head of the common law courts and the chancellor over the
exercise of their respective jurisdictions.  Equity is looking at intentions

 What led to the quarrel? Judicature act of 1873-75 and see if it fused common law with equity.
 How was it resolved and by who?
 Did statutes change? MAXIMS OF EQUITY

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1. Equity will not suffer a wrong without a remedy and this is the Creation of a trust (similar to a contract)
most principle of equity. Equity follows the law and it came to
compliment the common law. Formalities for creation of a trust
2. Where there is equal equity, the law prevails.
3. Where equities are equal, first in time prevails.  Intervivos (during the life)
4. Equity will impute an intention to fulfill an obligation.  Testamentary (after death)
5. Equity acts in personam  Sacred trusts

3cs of trusts
NATURE OF EEQUITTABLE INTERESTS
Certainty of words
DOCTRINES OF EQUITY
Certainty of subject matter
 Election
 Performance Certainty of objects
 Satisfaction
HISTORIC EVOLUTION OF EQUITY
EQUITTABLE REMEDY OF INJUNCTION

 Granted Equity means whatever is right and just in man’s dealings with fellow man.
 Denied However, equity in the popular sense has been criticized since equity and
morals may vary from one person to another.
SPECIFIC PERFORMANCE
The general juristic meaning of equity is the power of equity to meet the
THE CONCEPT OF TRUSTS
moral standards of justice. Alternatively, equity in the general sense means
Equity gave birth to the concept of trusts. The essence of trusts is that a liberal and general interpretation of the law without antagonizing the law
properties held by trustees under duty to apply for the benefit of the itself. Equity in the general sense is based on a case by case basis.
beneficiaries. To apply for a trust one must have;
Equity in the technical juristic sense means a special and peculiar
 Settler department of English legal system which was created, developed and
 Trustee administered in the court of chancery. (Judicature act 1875-UK,
Judicature act 1873-75) The effect of the two was to combine….
 Beneficiaries
ORIGINS OF ENGLISH EQUITY
The concept of a trust has connection to conditions, charges, office of
personal representatives. NATURE OF CHANCERY JURISDICTION
 Implied trusts,
 Criteria of operation
 express trusts,
 Based on the common law rules but more liberal
 public trusts
based on reason, conscience and just because acts in
persona and it’s about fairness and justice.

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CONTENT OF EQUITY
Its form/ how was it like?
 Exclusive jurisdiction- it created new rights.
 Concurrent jurisdiction which meant the creation of new
remedies.
 Equity shall not suffer a wrong without a remedy.
 Auxiliary jurisdiction as it came with new procedures.
By the nature of equity, it looked at individual circumstances so as to
remove the rigor of the common law.
Equity is moralistic in nature.
It developed in equitable principles/ maxims of equity.
In 1615, a quarrel broke out between The Lord Chief Justice the head of the
common law courts and chancellor over the exercise of their respective
jurisdictions.
The origins of equity and of the trust die in the short comings of common
law.
The common law and equity were two alternative systems of justice. Where
two systems exist, conflict is bound to occur. Equity supplemented the
common law by offering compatible remedies in some cases but in others it
produced a direct conflict with common law. A court f chancery often
issued an equitable injunction order in an individual to cease an action
which had been commanded by the common law court.
Success of equitable remedies depended on the ability of the sovereign to
exercise prerogative powers. The rules of equity in the 18th century became
nearly as rigid as those of the common law. Why?
The JA of 1873 finally transferred the powers of common law courts to the
supreme courts. From there on no division of the high court may issue an
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injunction to dispute a proceeding in another division thereby bringing an
end to the most controversial dispute between the two systems.
Legal remedies remained a matter of right. The equitable remedies
continued to be discretionary because equity acts in persona.
Courts of equity served a function of allowing just remedy where the
common law had been rigid.
Role of equity in the contemporary world/ trade/ family/ social
complexities
Impact of the Roman conquest on the evolution of equity
Content of equity
Unlike the English legal system which had a struggle in relation to equity
and common law, at the date of the reception date, Uganda received both
the principles the common law and equity. Judicature acts of Uganda
The courts in Uganda are bound to apply both the principles of equity and
common law. Where there is a conflict, equity shall prevail.
At the time the, the chancery judges were not restricted by the doctrine of
precedent.
The common law was rigid because of the growing power of parliament,
common law judges pressed more emphasis on the form rather than the
content of the writs, and the common law courts only handled cases that had
established remedies, the element of legal positivism.
THE STATUTE OF WESTMINSTER
It gave the chancery power to modify existing writs to accommodate new
cases. The common law judges attempted to frustrate it by cancelling many
writs. Where the common law gave remedies, they were inadequate though
sufficient and never fulfilled the aims of justice. By the end of the 13th
century, the common law courts were insufficient since they could not
provide remedies that the plaintiffs sought. As a result, the equity courts
became popular because you could not suffer a wrong without a remedy.
CONTENT OF EQUITY
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Equity developed to handle issues of trust and confidence.
Equity came in to provide a platform to address what the common law
could not address.
Do restrictive covenants pass with the land?
See also: Judicature ACTS 1873-1875
Why did the common law fail to adjust to accommodate what equity
addressed?
RELATIONSHIP BETWEEN THE COMMON LAW AND EQUITY
Once the chancery court was created, it received a lot of opposition to its
jurisdiction from the common law courts and parliament, because of the
resentment to change, the chancery jurisdiction and remedies were
unknown to the common law of the land, common law was the brain child
of parliament; chancery jurisdiction was undermining the common law
position.
During the second part of the 16th century, the rivalry intensified and the
main reason was that the chancery had the power to issue a common
injunction to stop the implementation of common law courts orders. The
climax was the stage of the quarrel of the chief justice of the King’s Bench
and the lord Ellesmere. The conflict is shown in the Earl of Oxford’s case;
the Lord Chancellor argued that he had the power to set aside common law
judgments on the grounds of equity. On the other hand, Chief Justice Coke
said that the chancery courts had no right based on statute or common law
and that he would issue a writ of prohibition to stop chancery interference
with common law judgments. The controversy came before King James
who after taking advice from famous jurists decided in favor of the
chancery courts. The reason was the endearing nature of equity and people
presiding over the chancery courts were clergy men.
From 1615, equitable rules became superior to common law rules in the
English legal system thus attracting more litigants. Soon they became
inefficient, corruption crippled in which destroyed the system. This called
for reform.
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The first reform was that the common law courts were allowed to apply
rules of equity in cases before them to save time. Common law courts could
issue certain writs.
The chancery amendment act, chancery courts were allowed to exercise
common law powers.
Chancery amendment act of 1858 (Lord Cain’s act) which gave the
chancery power in cases of contracts or torts to award damages.
Until 1857 there were still differences. There was a commission which
recommended the fusion of both systems. The results are the judicature acts
of 1873-75 whose impact was the abolition of the duo administration of
justice. Chancery courts were abolished since the high courts were allowed
to exercise both the common law and equity.
The statute provided for powers to issue a writ subject to the powers of the
king and his council.
The common law courts attempted to frustrate this new development by
assuming power to decide on the validity of the writs which were issued by
the chancery. By so doing, they ended up cancelling new writs. The litigants
faced hardships because of most of the situations which the new writs were
addressing could not be handled by existing writs.
The common law remedies which were being given at the time were
inadequate to meet justice. This went on up to the 13th century. The litigants
started writing petitions to the king in council for reasons such as the feudal
system.
NATURE OF CHANCERY JURISDICTION
The criterion used was that justice was administered by the chancery courts
based on the common law rules. This is because equity came to supplement
the common law. However, the common law rules were administered in a
liberal way to achieve justice.
The equity jurisdiction in handling the petition was based on reason,
conscience and justice in administering the law. In the general juristic sense,
influenced the administration of the law by the chancery courts
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By the end of the 17th century, equity tended to be more flexible.
 There was a wide variety of writs.
 The chancery courts were not bound by the doctrine of
precedent so decisions tended to vary since no definite rules
had been setup.
 Most of the lord chancellors were non-lawyers so they
exercised their jurisdiction on good conscience and un justice.
Later, chancery jurisdiction lost its flexibility and adopted
precedent.
 The vague nature of the principle of conscience on which
it was based.
 The common law judges later presided over chancery
courts thereby making them to adopt the system of
precedent.
 Auxiliary jurisdiction whose main purpose was to
give better and effective justice.
The new procedures included
 interrogatory a system that allowed litigants
before litigation exchange questions and
answers
 beneficiary and trust
ADMINISTRATION OF EQUITY IN UGANDA
Specific situation and the repugnance test
1. liability of an executor for assets
Job v Job (1877) 6 Ch. 562
The rule of equity prevailed over the common law.
2. Agreement for a lease
Walsh v Lonsdale (1882) 21 Ch. D. 9
At common law the issue is the form and substance while at equity, it’s the
intention that matters.

3. Joint undertaking
Lowe v Dixon (1885) 16 Q.B.D 455,458
CONTENT OF EQUITY 4. Variation of a deed
Berry v Berry (1929) 2KB316
Evolved to handle issues of human relations and trust which
are binding.
NATURE OF EQUITABLE RIGHTS
 Developed to deliver the English legal system from
Equitable rights and interests came as a way of handling the
the oversights that had been created by the common
unconscionable manner within which the rights in rem operated
law.
(common law rights).
 Equitable jurisdiction is based on; The distinction between legal and equitable rights is important in
underscoring rigts over property. These two rights were best
 exclusive jurisdiction which involved creation of new discussed in lwanga v registrar of titles.
rights which depended on the nature of the remedy NSSF and H.W Ssentongo v Alcon international limited. Supreme
like the concept of a trust, tenancies, court 2009
 Concurrent which depended on the creation of new
remedies like equity shall not suffer a wrong without
a remedy.
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He/she may be a busy person who has not have time to inspect land and
uses agents, so imputed notice is that which arises when some person has
rights over the claimant’s rights in circumstances in which the defendant
 Rights in rem ought to be bound by the notice of that third party. The third party may be
 Rights in personam the defendant’s agent and the most notorious are surveyors and counsel.
The general principle of law, whenever there is an agent, there is a
principal. Any notice to the agent, is the notice to the principal.
 Do restrictive covenants pass with land?
 Mortgagor’s equity of redemption. Tizard’s case
 Position of equity in regard to equitable mortgage.
 An agreement to create a mortgage is good enough to create a Constructive notice
mortgage.
It arises when a person knows of certain facts which put her on inquiry as to
Rights in rem the possible existence of the rights of another person and that person fails
and she fails to make such inquiry or take such other steps as maybe
Equitable rights or interests were created exclusively by chancery necessary I the circumstances. Failure to make inquiry will lead to a finding
courts. that such a person has constructive notice of the other person’s right and
therefore takes subject to it.
 Purchase of property
The doctrine of notice is so wide that there are o circumstances that a
The doctrine of notice claimant will dodge it because all circumstances are there.

The role of this doctrine in most land law matters is to protect equitable If not for the doctrine of notice, equitable rights and interests would be in
interests in unregistered land so that the borders of legal rights do not defeat vain. For the purpose of the doctrine of notice is to prevent a buyer of
the rights of those of equitable interests. The purpose of the doctrine is to superior title from setting it up against prior or earlier owners of inferior
make persons bound by the rights of others in circumstances in which they interests (equitable interests and rights which affect the property). The
have notice of those same rights. effect of the doctrine of notice is that the buyer of a legal estate with notice
of prior equitable interest affecting the estate takes it prior to those interests.
The doctrine has tree forms; The doctrine of notice is one of the instances where equity looks at the
substance rather than the form of the transaction in order to arrive at a just
 Actual notice result. The concept of notice simply means knowledge of an existing fact.
 Imputed notice
 Constructive notice Williamson v Brown

A defendant will be said to have notice where he/she has any one of those
forms of notice or all of them. The effect of having notice is that the
defendant takes subject to equitable interests since he/she had notice.

Actual notice is a situation in which the rights have been brought directly
to the attention of the defendant such she does know of the existence and
nature of those rights.

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IMPACT OF THE REGISTRATION OF TITLES ACT (RTA) ON
THE DOCTRINE OF NOTICE
The land act seeks to protect rights of people with unregistered interests.
Section39 is on the restrictions of transfer of land by family members.
 The doctrine of bonafide purchaser for value without notice.
THE LAW OF ASSIGNMENTS
They were defined in Norman v ……an assignment is an immediate transfer
of ……vested in the contingent from the assignor to the assignee. A
Assignment enable sthe benefit of a contract to be transferred to a third
paerty called the assignee. Assignment can be looke d at as whether it is a
chose in possession or a chose in action.
The positions of equity and common law were different. At common law,
the common law declined to give effect to assignments of choses in action
(rights which could only be enforced by bringing an action as opposed to
taking possession of a physical thing). The common law feared that giving
them effect would lead to apprehension, maintenance of unnecessary
litigation.
1902 2 KB 427, chose in action is a known legal term used to describe all
personal rights on property which can be enforced by action and not taking
physical action.
A list of choses in action
 Debts
 Negotiable instruments
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CHOSE IN POSSESSION
It had novations which are contracts between the debtor, creditor and third
party that the debt owed by the debtor shall from that point on be owed to
the third party. For a novation, the consent of all the 3 parties is required
while in assignment it is not necessary. It creates anew contract between the
third party and the debtor however in the case of Tatlock v Hariss 1789 3
TR 174, a third party will fail if no consideration moves from him for the
debtor’s promise to pay him.
Acknowledgement
Where a creditor asks his debtor to apply a third party and the debtor agrees
to do so and notifies the third party for the agreement, the 3rd party becomes
entitled to sue the debtor.
Power of attorney
Where a creditor gives a third party a power of attorney authorizing such
party to sue for a debt without liability to account to a creditor, such a
power of attorney would be given effect at the common law.
Equity regarded choses in action as property which could be transferred and
these could be legal or equitable rights. A legal chose in action is one which
could only be sued for in a common law court for example a contract debt.
An equitable chose is one which could be sued for in a court of chancery
e.g. an interest in a trustee fund.
Position under statute
1. Land act on bonafide occupants (34 and 35)
2. Judicature act (1873-75…..sec 25)
3. Case of Wavah holdings
4. Sec 10 of MCA
TYPES OF ASSIGNMENTS
1. Absolute assignment which occurs when the assignor transfers his
entire interest in a chose to the assignee.
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2. Assignment by way of charge which occur where the assignor
uses the assignment as security for a loan such that the assignee
can only exercise rights with regard to the chose at the stage of
enforcement of the security. Duham Brothers v Robertson A sum
was due to a builder under a building contract and assigned th e
sum due to him to the lender as security for the loan until the
money lent is repaid. It was held that the assignment was by way
of charge and that the builder had not assigned absolutely the
amount owed to him (1898 1 QB 75)
3. Assignment of part of a debt. This occurs where one assigns only
a portion of the amount due to her. As such, the assignment is not
absolute; the court will require the presence of all parties before
enforcing it.
4. Conditional assignments. This term applies to assignments which
are subject to a condition. Section 25 of the judicature act of 1873.
REQUIREMENTS FOR A VALID ASSIGNMENT
1. There are formalities to be fulfilled before making a valid
assignment. Dispossession of an equitable interest must be in
writing. All assignment of an equitable chose would be void
(1960 AC 206) other formalities apart from writing may be
required like particular sums of money.
 Mere rights of action such as a bare right to sue for breach of
contract cannot be assigned. Principles of public policy on
maintenance. 1994 AC 142.
 Public policy does not allow officials to assign their wages, sharing
of legal fees with non-counsel as it will reduce dignity of public
office.. 1859 29 LJ Ch
 Maintenance and payment to a wife. If these follow matrimonial
proceedings cannot be assigned for fear that to do so, may leave a
wife destitute.
 Mere expectancies because they are yet to materialize but where
there is consideration, it is possible. 1888 13 AC 523
 Assignment by operation on the law. For example death. When one
of the contracting parties dies, his rights pass on to his
representative. 1938 AC 624
 Bankruptcy, upon bankruptcy, the things in action of the bankrupt
as at the time of the bankruptcy are deemed to have been assigned
his trustee in bankruptcy. Insolvency act of Uganda, Wilson v
united counties bank 1920 Ch 102.
 Negotiability. Assignment of certain negotiable instruments.
 Bills of exchange act. A negotiable instrument may be transferred
by delivery. There is no need to furnish consideration.

2. Intention to assign -1905 AC 454.

3. Communication to assignee. An assignment is not effectual

until communicated to the assignee. 1903 2 KB 208. The
communication may be by assignor or someone with legal
authority

4. In case of 2 assignments of the same chose in action, the rule

in dear v hall 1823

Rights that is not assignable

 Contracts expressed not to be assignable. Rights in such contracts

cannot be assigned in breach of the contract.
 Personal contracts like employment requiring specialized skills,
specialized skills.

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