UNIT 2

MAXIMS OF EQUITY

The maxims of equity are fundamental principles that guide the exercise of equitable jurisdiction. These maxims reflect the moral principles that underpin equity and ensure justice and fairness. The key maxims include:

1. Equity will not suffer a wrong to be without a remedy: This maxim means that equity provides a remedy for every wrong. It aims to ensure that justice is done where the common law does not provide a remedy. See the Earl of Oxford’s Case (1615) 1 Ch Rep 1, which established that equity would intervene when the common law was inadequate.
2. Equity follows the law: Equity does not override the law but follows it where the law applies. Equity only intervenes to supplement the law when the legal remedy is insufficient. See the case of A.G. v. Guardian Newspapers Ltd (No. 2) (1990) 1 AC 109, which demonstrated that equitable principles would be applied in line with existing legal frameworks.
3. He who seeks equity must do equity: this is where a claimant seeking an equitable remedy must be willing to act fairly themselves. See the case of D&C Builders Ltd v. Rees (1966) 2 QB 617, where the court refused equitable relief because the claimant did not act equitably.
4. He who comes to equity must come with clean hands: this is where a claimant must act fairly and without deceit or unfairness to receive an equitable remedy. See the case of Chappell v. Times Newspapers Ltd (1975) 1 WLR 482, which upheld that a party seeking equitable relief must have clean hands.
5. Delay defeats equity (Equity aids the vigilant and not the indolent): this is where equitable relief will not be granted to those who delay unduly in seeking it. See the case of Leaf v. International Galleries (1950) 2 KB 86, where the court held that the claimant was barred by laches for waiting too long to seek an equitable remedy.
6. Equity looks to the intent rather than the form: this is where equity focuses on the substance and intent of actions rather than their formalities. See the case of Berry v. Berry (1929) 2 KB 316, where the court focused on the intent of the parties rather than the strict legal form.
7. Equity regards as done that which ought to be done: this is where equity treats an obligation to perform an act as if the act has already been performed. See the case of Walsh v. Lonsdale (1882) 21 Ch D 9, where the court held that equitable principles could treat certain acts as completed if they should have been performed.
8. Equity acts in personam: this is where equitable remedies are directed against specific persons, requiring them to act or refrain from acting in a certain way. See the case of Penn v. Lord Baltimore (1750) 1 Ves Sen 444, where the court asserted that equitable decrees operate in personam.

PRIORITIES

Priorities determine the order in which competing equitable interests are satisfied. When multiple claims exist over the same property, equity establishes rules to decide which claims take precedence. They are as follows;

1. First in time, first in right: Generally, the first equitable interest created has priority over subsequent interests. See the case of Rice v. Rice (1853) 2 Drew 73, which established that earlier equitable interests have priority over later ones unless there is evidence of fraud or negligence.
2. Notice: this happens if a subsequent purchaser acquires an interest in the property with notice of an earlier equitable interest, they will be bound by that interest. See the case of Pilcher v. Rawlins (1872) 7 Ch App 259, where the court held that a purchaser without notice of a prior equitable interest takes free of that interest.
3. The doctrine of tacking: this is where a lender who advances further money to a borrower can add this to the amount of the original loan, provided no intermediate interest has priority over it. See the case of Hopkinson v. Rolt (1861) 9 HLC 514, where the court discussed the circumstances under which tacking is permitted.
4. Subrogation: this is when one party pays off a debt for which another is primarily liable, the paying party may step into the shoes of the creditor and acquire their rights. See the case of Boscawen v. Bajwa (1996) 1 WLR 328, where the court upheld the principle of subrogation in equity.

ASSIGNMENT OF CHOSES IN ACTION

Choses in action are personal rights not attached to property that can be enforced by legal action, such as debts or rights under a contract. Equity allows for the assignment of these rights. They includes;

1. Formal requirements: For an equitable assignment, there must be clear intent to transfer the chose in action, and the assignment must be in writing. See the case of Dearle v. Hall (1828) 3 Russ 1, where the court held that notice must be given to the debtor for the assignment to be effective.
2. Notice to debtor: this is where the assignee must give notice of the assignment to the debtor or obligor to perfect the assignment and protect against subsequent assignments. See the case of R. v. Gresham Life Assurance Society (1902) 1 KB 694, where the importance of notifying the debtor was emphasized.
3. Priorities in assignments: this is where the first assignee to give notice to the debtor generally has priority over other assignees. See the case of William Brandt’s Sons & Co v. Dunlop Rubber Co (1905) AC 454, where the court upheld that priority is determined by the timing of the notice.

CONVERSION AND RECONVERSION

Conversion and reconversion deal with the equitable transformation of property from one form to another. they are both defined thus;

1. Conversion: This is the process by which equity treats real property as personal property or vice versa. This often occurs through a direction in a will or trust. See the case of Fletcher v. Ashburner (1779) 1 W & T 497, which established that land directed to be sold is treated as personalty.
2. Reconversion: Reconversion occurs when the beneficiary decides to take the property in its original form, effectively undoing the conversion. See the case of Ackroyd v. Smithson (1780) 1 Bro CC 503, where the principle of reconversion was applied when the beneficiary opted to retain the property in its original form.

ELECTION

The doctrine of election requires a beneficiary to choose between two inconsistent or alternative rights or claims. It prevents a party from accepting the benefit of an instrument and rejecting its burdens. We have;

1. Elements of election: There must be a clear intention that the beneficiary cannot enjoy both benefits simultaneously. See the case of Codrington v. Codrington (1875) LR 7 HL 854, where the beneficiary had to choose between benefits under a will and other rights.
2. Time for election: this is where the beneficiary must make an election within a reasonable time once they are aware of the need to choose. See the case of Brown v. Brown (1993) 3 NWLR (Pt. 291) 1, where the court held that the election must be made within a reasonable time frame.

SATISFACTION

Satisfaction occurs when an obligation is considered fulfilled by the provision of something different from what was originally stipulated, often seen in the context of wills and trusts. We have;

1. Satisfaction of legacies: this is where equity may consider a debt or obligation satisfied if the testator leaves a legacy to the debtor. See the case of Talbot v. Shrewsbury (1863) 31 Beav 395, where the court held that a legacy given by a testator can be considered a satisfaction of a debt.
2. Distinction from performance: this is where satisfaction differs from performance, which involves carrying out the original terms of the obligation. See the case of Powys v. Mansfield (1837) 6 Sim 529, the distinction between satisfaction and performance was clarified.

CONCLUSION

These principles and maxims of equity, supported by Nigerian cases and statutes, form the foundation of equitable remedies and ensure that justice is served where the common law may be insufficient.